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28 July 2021
18:41 hour

Would I buy Rolls-Royce shares at 8-month lows?

The Motley Fool UK

21/07/2021 - 14:40

The Rolls-Royce share price fell to sub-90p levels on Monday. Is it a low enough price to make it a bargain buy for this Fool? The post Would I buy Rolls-Royce shares at 8-month lows? appeared first on The Motley Fool UK.


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  1. 2 reasons to buy Rolls-Royce at $1.70 (19/03/2021 - Reddit Stocks)
    My thesis for buying $RYCEY (Rolls-Royce) is this simple line here: “In terms of their aims, management has a goal of developing low carbon solutions for hybrid, hydrogen, and electric powered craft"?????? 1.) I think 2021/22 might be a better year 2.) Free cash flow for these new green solutions 2 reasons to buy Rolls Royce   submitted by   /u/xsweeperx [link]   [comments]
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  2. If you haven’t yet, I recommend looking at this Rolls Royce Long ETF, as Rolls Royce is starting to pick up! Not a financial advisor. (23/02/2021 - Reddit Stock Market)
      submitted by   /u/CranusCranii [link]   [comments]
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  3. Will the Rolls-Royce share price rise in July? (25/06/2021 - The Motley Fool UK)
    The Rolls-Royce Holdings (LSE: RR) share price has been grounded over the last year. As I write, the aero engine firm’s shares have risen by just 5% since June 2020. That leaves them well behind the 15% gain delivered by the FTSE 100 over the same period. I reckon investors have put Rolls in a holding pattern while they wait to see when air travel will really get started again. But with travel restrictions now being lifted more widely, will July be the month when the market takes a fresh look at Rolls-Royce shares? What do we know already? The last trading update from Rolls-Royce came in May. CEO Warren East said that flying hours during the first four months of 2021 were 60% below 2019 levels. This was pretty much as expected. Flying on long-haul routes has been supported by cargo demand and airlines preserving their airport slots by flying near-empty planes. East said that vaccination progress in the US and UK was “encouraging” but admitted the timing of a wider recovery was still “uncertain”. Rolls-Royce’s other business units were said to be performing as expected, with defence especially strong. A turning point? Rolls-Royce expects to start generating free cash flow “at some point during the second half of 2021.” When this happens will depend on how quickly engine flying hours recover, driving up billable revenue. I reckon this could be a key turning point for the Rolls-Royce share price. Free cash flow is essential to Rolls’ recovery. Without this, the group can’t start to repay debt. More widely, I think investors may be waiting to see if East can deliver on his free cash flow forecasts. Even before the pandemic, these targets were a key part of his turnaround strategy. The next trading update from Rolls-Royce is due on 5 August. I’ll be watching closely for any changes to the company’s forecasts. Rolls-Royce share price: up in July? At about 108p, Rolls-Royce stock has already risen by 170% from the lows of 40p seen when the company launched a £5bn refinancing last October. After such strong gains, is a recovery already priced into the shares? I estimate that Rolls-Royce’s current valuation is about 20% below the level seen at the end of 2019, including debt. If profits return to pre-pandemic levels, I can see some room for further share price gains. Broker forecasts also seem quite encouraging to me. Consensus forecasts for 2022 price Rolls’ stock on 25 times earnings. This multiple falls to 15 times earnings for 2023, when profits are expected to rise above 2019 levels. If international travel really takes off in July, then I think we could see Rolls-Royce’s share price move higher next month. However, I think a fair level of recovery is already priced into the stock. Any disappointments could cause the price to slump again. For this reason, I won’t be buying Rolls-Royce shares at current levels. I don’t think the potential rewards are big enough to outweigh the risks. The post Will the Rolls-Royce share price rise in July? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading Here’s why I’m avoiding Rolls-Royce shares Why is the Rolls-Royce share price having such an uncertain June? What’s going on with the Rolls-Royce share price? Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  4. Rolls Royce? (24/02/2021 - Reddit Stocks)
    Hey everyone. Just wondering what the thoughts on rolls royce are? The pandemic really hit their price hard. Dropped from £10 to just under £1. The beloved British company recently just won a contract in India too. I won't go I to too much details. All details are at your fingertips.   submitted by   /u/TopSeaworthiness7501 [link]   [comments]
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  5. The Rolls-Royce share price could be on the road to recovery (27/07/2021 - The Motley Fool UK)
    With the Rolls-Royce (LSE: RR) share price dropping below 100p, I am tempted to buy this stock before the civil aerospace company’s recovery becomes fully realised. But with possible further damage to the aviation sector brewing because of new variants of coronavirus such as the Delta variant, some investors might see this share as one to be avoided. Here, I explain why I will be betting on a favourable future in 2021 for Rolls-Royce. Another lockdown could be devastating for Rolls-Royce First things first, I need to look at what another lockdown could mean for the Rolls-Royce share price. With no planes in the air due to travel restrictions, Rolls-Royce would continue to lose revenue on its maintenance contracts as these are dependent on airtime. This would be a big blow for the company because these contracts contribute to Rolls-Royce’s main bulk of revenue, whereas the company only just about breaks even on the initial sale. However, this is just speculation for now, and the situation looks a lot better than it did last year. Rolls-Royce is not making any adaptations to its recovery plan for the time being, and with air travel having its busiest weekend since the pandemic hit, I am quite hopeful that this is a sign of positive things to come. Rolls-Royce restructuring programme Following on from its cost saving plan from 2020, Rolls-Royce estimated that it saved £1bn beyond its expectations before the pandemic arrived. The company now aims to reach £1.3bn in operating costs and capital spend savings by the end of next year. Of course, we can see that Rolls-Royce is steadfastly committed to its restructuring programme as it temporarily shut down its plant in Renfrewshire this week. With the company continuing to do good on its word to cut costs, I am convinced that its commitment will lead to more investor confidence on the Rolls-Royce share price. Further, the balance sheet looks a lot healthier than compared to last year, and the threat of bankruptcy is no longer in sight. This is mainly because the company secured £7.3m in additional liquidity in 2020. If the company meets its expectations of turning cash flow positive in the second half of 2021, then I think this success will attract a lot of buyers. This could lead to a very profitable return for me if I add this share to my portfolio before Rolls-Royce announces its interim results on the 5th of August. Will the Rolls-Royce share price recover? The dark times of Covid-19 could very well be behind us, but with this new Delta variant and any more variants to come, the situation could change very quickly. The effects of another lockdown would most likely damage Rolls-Royce’s progress, and its thoughts of turning cash flow positive would become an all-forgotten dream. However, I think that the current situation points in a more positive direction. Passengers are flying again, and the government is putting more countries on the green list. I also have confidence that Rolls-Royce’s restructuring procedure will put it on the road to recovery. Whilst it may still be a bit of a bumpy ride for the Rolls-Royce share price, I will be buying this stock as a recovery play. The post The Rolls-Royce share price could be on the road to recovery appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading I’d avoid the Rolls-Royce share price and buy this FTSE 100 stock instead Can the Rolls-Royce share price hold out until the end of 2021? 5 reasons to buy Rolls-Royce shares – and why I’m not Are these 2 FTSE 100 travel stocks a bargain? Would I buy Rolls-Royce shares at 8-month lows? John Town has no position in the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  6. Is the Rolls-Royce share price cheap at 100p? (07/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price has struggled to make headway over the past couple of months. We did see an impressive rally late last year from 40p to around 135p. Recently, the share price has since fallen back to trade in a range between 100p and 110p. Given that shares were trading above 200p at the start of last year, does the current price make it a cheap buy? A tight trading range I think there are a few reasons why the Rolls-Royce share price is currently trading in a tight range around 100p. Firstly, I think a lot of investors are waiting on the sidelines for half-year results. These are due out on 5 August. This should provide a more detailed picture of how the business has coped in the period when lockdown restrictions were starting to end. In theory, this should support the share price if the planned outlook financials are raised. However, nothing is certain at the moment, and so some are likely keeping their powder dry until August. Another reason for the lack of movement recently could be due to the policy regarding Covid-19 restrictions. The anticipated freedom day in June has been pushed back to later in July. The international travel traffic light system hasn’t been the most efficient process. This has meant that the amount of flights and commercial aviation has been limited. Due to the ties Rolls-Royce has to this sector, I’m not surprised that the share price hasn’t been able to find a positive catalyst to move higher. Is the current Rolls-Royce share price fair? It’s hard to confidently say that the Rolls-Royce share price is cheap at current levels around 100p. This is because what is cheap to me might not be to someone else.  A traditional method would be to look at the price-to-earnings ratio. Usually, a low ratio could indicate that a stock is undervalued and cheap. However, Rolls-Royce made a loss last year, so the ratio is negative.  It’s also hard to rank Rolls-Royce against other companies as it depends on what sector I put it in. If I compare it to BAE Systems with a P/E ratio of 11.3, then I would say the share price looks cheap. What about if I compare it to an aviation company like International Consolidated Airlines Group? IAG has an even more negative P/E ratio than Rolls-Royce. So I could argue that IAG offers better value than the current Rolls-Royce share price. I could also look internally at Rolls-Royce. If the half-year results show a reduction in debt and good cash savings, this should help to boost the net asset value. In turn, this naturally should help to push the Rolls-Royce share price higher, as the fundamental value of the business has increased.  2021 net debt (pre-disposals) is expected at £4bn, but potentially getting back £2bn with disposal proceeds. Again, I’m going to have to wait until next month for an update on how well this is going. Overall, I think the Rolls-Royce share price is fairly priced around 100p right now. However, results next month will allow me to get a much better picture in this regard, depending on earnings and debt levels. The post Is the Rolls-Royce share price cheap at 100p? appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Where will the Rolls-Royce share price go in July and beyond? Rolls-Royce shares are below 100p. Should I buy? The Rolls-Royce share price: 3 things that could give it a boost jonathansmith1 has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  7. Could the Rolls-Royce share price fall below 100p? (27/05/2021 - The Motley Fool UK)
    One of the frustrating things for shareholders in Rolls-Royce (LSE: RR) in recent months has been its struggle to maintain altitude. The Rolls-Royce share price reached 127p in March. But since then it has moved markedly lower. Over the past year, it has lost 10% of its value. So might the shares might fall beneath 100p? Why has the Rolls-Royce share price been falling? One of the points to consider is what has been exerting downward pressure on the aerospace giant’s share price lately. The company is significantly exposed to air travel. The more hours planes with its engines installed fly, the greater its service revenue. Over the past couple of months, hopes of increased European travel have been dampened. I think that has affected the share price. Reasons to be bullish But I see some positive signs for the Rolls-Royce share price. For example, the company said this month that performance so far this year has been in line with expectations across all of its business units. That lack of nasty surprises should help restore some investor confidence in Rolls-Royce. The company has repeatedly said that it expects to turn free cash flow positive in the second half of this year. That would be big news, as lately it has been bleeding cash. If it is able to turn free cash flow positive, that will reassure investors about its liquidity. Last year, a rights issue was heavily dilutive. If shareholders are more comfortable about liquidity growing due to free cash flow, it could be positive for the Rolls-Royce share price. Will the shares fall below 100p? Despite what I regard as positive developments, the Rolls-Royce share price has been drifting downwards lately. If there are more reasons to doubt the speed and scale of European aviation recovery, I think that could easily push the shares below 100p. Any further delay to the free cash flow target would also hit the shares badly in my view. So, I don’t think the shares will necessarily stay above 100p. I could certainly see them falling below that level again. My move on the Rolls-Royce share price But I think the longer-term outlook for the Rolls-Royce share price remains good. Flying demand will come back, in my view – it’s just a matter of time. There are some promising signs outside Europe. Already in the US, for example, United Airlines has upgraded its second-quarter earnings forecast. Such improved demand should help Rolls-Royce. I still think the Rolls-Royce share price could get to 150p or higher this year. But I don’t like how sensitive the share price is to demand recovery in the aviation sector. It has no control over that so is effectively a hostage to fortune. For that reason, even though I do see potential upside, I’m not currently planning to buy Rolls-Royce shares. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Can the Rolls-Royce share price stay above 100p? The Rolls-Royce share price has been ticking upwards. Is it time to buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Could the Rolls-Royce share price fall below 100p? appeared first on The Motley Fool UK.
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  8. Why is the Rolls-Royce share price having such an uncertain June? (21/06/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) is one of the few FTSE 100 stocks that, as my Motley Fool colleague Rupert Hargreaves pointed out, has essentially gone nowhere over the past 12 months. It’s pretty much flat since the start of 2021 too. But looking a little closer, we can see the the Rolls-Royce share price has actually been through a lot of short-term ups and downs. Looking at June alone, Rolls shares have lurched between a high of 113.5p and a low of 104p. That’s a swing of 9% from lowest to highest, and way more volatile than the Footsie. Similarly sized ups and downs have been going on for months. It’s as if investors keep wanting to get in, keep thinking maybe the time is ripe for the recovery to start… and then it doesn’t take off and fades again, until the next time. I know it’s dangerous to read too much into short-term share price volatility. And I would never make an investing decision based on what the Rolls-Royce share price has done over the past few months or so. But if my speculations on investor sentiment are anywhere near the truth, they’re really just reflecting my own thoughts. I like the company The thing is, I’ve liked Rolls-Royce for a long time. And it’s one company that I’d really like to buy a chunk of at a cheap price. The company had hit a tough patch even before the pandemic brought a near halt to aviation. I reckon that presented a good buy at the time for investors with a long-term horizon. But it’s history now. I really do think the Rolls-Royce share price will recover from its current hammering. The only thing I just can’t get my head round is how long it might take for a sustainable profits recovery to set in. Oh, two things — and whether Rolls has the liquidity needed to see it through to such times. If it hasn’t, we might see further falls. In the past month, I can’t help feeling the delayed lifting of the UK’s final Covid-19 restrictions has made investors a bit twitchy again. Right now, Boris Johnson has said it’s “looking good” for the new target date of 19 July to be met. But, well, he’s said a lot of things over the years. Rolls-Royce share price uprating? So what are my thoughts now about the next stage for Rolls as an investment? To turn my own sentiment sufficiently bullish, I think I’ll need to see a positive set of results. In particular, I want to see how the balance sheet and cashflow situation are looking. Once we see clearer developments on those fronts, if we see them, I can see the Rolls-Royce share price enjoying an uprating. When might that come? First-half results should be with us on 5 August, and that’s really not very long now. By then, we should have firmer news on the pandemic front. And, hopefully, a bit of confidence returning to the aviation business. I’ll be waiting at least that long before I finally decide, and possibly a good bit longer. I think there’s probably a 50/50 chance that I’ll end up buying Rolls-Royce shares one day. The post Why is the Rolls-Royce share price having such an uncertain June? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading What’s going on with the Rolls-Royce share price? Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Where will the Rolls-Royce share price go in June? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  9. Can the Rolls-Royce share price hold out until the end of 2021? (24/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) has had a rocky week, kicking off with ‘freedom day’ Monday. Did the investment world rejoice after most UK Covid-19 restrictions were lifted? No, the stock market went into a brief tailspin instead. The Rolls-Royce share price was one of the day’s biggest fallers. The aero engine maker has bounced back a bit since then. But we’re still looking at a share price slide over the past month and a half. It all seems to be due to fears of infection rates increasing again, with the UK breaking 50,000 cases in a single day for the first time since January. The Delta variant is ripping through populations, far more rapidly than its ancestors. And the longer people remain grounded, so do aeroplanes. And Rolls-Royce’s business pains continue. Rolls has raised a lot of new finance to get it through the crisis, boosting its 2020 liquidity with £7.3bn in new debt and equity. If that keeps the company going until it returns to profit, I reckon it should do fine. And it might even be a good investment now. Rolls-Royce share price prospects But I am convinced the Rolls-Royce share price in 2021 will depend on seeing signs of those profits getting closer while a decent cash pile remains. And if it looks like there are going to be any delays to the firm’s expectations, we could see the shares dip further. But what are those expectations? Back in March, when reporting 2020 full-year results, Rolls gave us a clue. It told us its is aiming for “free cash flow to turn positive during second half 2021 and at least £750m as early as 2022.” Quite how much free cash flow Rolls expects this year is not clear. But that hoped-for £750m figure for 2022, while welcome if it comes off, is not earth-shatteringly huge. Not for a company that recorded a free cash outflow of £4,185m in 2020. It’s been a long time since those results. And we’ve had a few false starts regarding air travel. All that red, amber, green stuff was supposed to simplify things. But the constant changing has sown nothing but confusion. And we haven’t had as many people back to flying as I’d have thought this time last year, not by a long way. Key date for shareholders That makes 5 August a crucial date for investors’ calendars. It’s the day Rolls is due to deliver first-half results. And I reckon that could be the key factor in determining where the Rolls-Royce share price goes for the remainder of 2021. Many will be looking at the bottom line profit/loss figure, but not me. I want to see only two things, starting with the liquidity situation. What will that say about the likelihood of the firm needing to tap the markets again for further funding? Secondly, what will the company say about its cash flow hopes? For the share price to hold out for the rest of the year, I think we’ll need positive news on both fronts. But if that’s what we get, it could be a great time to buy. The post Can the Rolls-Royce share price hold out until the end of 2021? appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading 5 reasons to buy Rolls-Royce shares – and why I’m not Are these 2 FTSE 100 travel stocks a bargain? Would I buy Rolls-Royce shares at 8-month lows? The Rolls Royce share price is below 100p – so is it a buy? Can the Rolls-Royce share price recover in 2021? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  10. I’m avoiding the Rolls-Royce share price. I prefer this FTSE AIM stock (15/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR.) had a 2020 to forget. And the Rolls-Royce share price has continued to fall in 2021. I prefer another FTSE stock that I believe is a good option for my portfolio. Rolls-Royce share price continues to falter in 2021 Rolls-Royce was already having issues prior to Covid-19, like the Trent 1000 engine problem which cost $1bn to rectify. The pandemic saw RR cut approximately 9,000 jobs and was staring down the barrel of a multi-billion dollar loss for 2020.  As I write, the Rolls-Royce share price is down by nearly 15% in 2021. I can currently buy shares in RR for 92p per share. In 2020 alone, its share price fell by 54% from 234p to 107p per share.  I believe there could be better days ahead for Rolls-Royce, however. It has undergone a cost-cutting exercise which will help save it over £1bn. Next, the aviation sector as a whole will eventually return to what it was pre-Covid-19 although this may take a few years. Finally, the rollout of the vaccine will help normality resume and, in turn, help RR. Rolls-Royce is due to release first-half results in August. I am not buoyed by the Rolls-Royce share price currently but will check out these results. For now, I will avoid Rolls-Royce for my portfolio and look to other FTSE stocks. FTSE AIM stock falls to make it cheap ASOS (LSE:ASC) released its most recent results today. A negative reaction has caused a drop in its share price. I think this could be a prime buying opportunity to add ASOS shares to my portfolio. Unlike the Rolls-Royce share price, the ASOS share price has performed well in 2021 until the beginning of July. It rose by 5% from 4881p per share to 5150p. As I write, the ASOS shares are trading for 3920p per share. This is a remarkable 23% dip in 2021 overall. At current levels it is at its cheapest point since August last year. Traditional clothing retailers were hit hard by the Covid-19 pandemic but e-commerce clothing giants such as ASOS benefited. In ASOS’s trading statement for the four months to June, retail sales rose by 36% year-on-year to £1.24bn. UK sales rose by 60% year-on-year while international sales rose 15% compared to the same period last year. Despite ASOS experiencing strong sales, I believe investors have reacted negatively to news that trading had slowed in recent weeks. The final three weeks of the trading period was described as “more muted” due to Covid-19 uncertainty and poor weather. ASOS said it expects such trading volatility to continue in the short term. In addition to this, global supply chain issues with freight and delivery will hamper ASOS too. My verdict on ASOS I think comparing just the ASOS share price and Rolls-Royce share price to consider which to buy would be the wrong way of looking at things. There is lots more to consider and I much prefer FTSE AIM incumbent ASOS despite its share price drop today. I am fully aware of the challenges ASOS faces with headwinds expected from supply chain issues and the ongoing pandemic affecting operations and sales. Despite that, its share price drop has presented an excellent opportunity to add ASOS shares to my portfolio just now. The post I’m avoiding the Rolls-Royce share price. I prefer this FTSE AIM stock appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The ASOS share price collapses to 11-month lows! Is now the time to buy? The Rolls-Royce share price continues to fall: should I buy now? The Rolls-Royce share price is falling. Is the stock one to buy? Why is Rolls-Royce a penny stock? What’s going on with the Rolls-Royce share price? Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended ASOS. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  11. The Rolls-Royce share price has fallen. Is now the time to buy? (10/05/2021 - The Motley Fool UK)
    Shares in Rolls-Royce (LSE: RR) have fallen more than 20% from their high last month. Over the past year, they have dropped dramatically and struggled to recover from March 2020 when the pandemic began, with the Rolls-Royce share price falling as low as 64.86p at the end of October. There has been a strong recovery since then, with the share price back to 109p at the time of writing. Below are some of the reasons why the share price might be down. Reopening prospects mixed Recently, Rolls-Royce shares have tended to do well when there has been more optimism about the world opening up and return to international travel as we used to know it. A large part of the company’s business relies on there being international travel due to its aircraft engine business. The easing of restrictions in the UK has so far been a success and the vaccine rollout is also on track, which is allowing optimism over being able to travel abroad again this summer. However, countries such as India and Kenya have seen a dramatic rise in Covid-19 cases, which may make it harder to travel to these countries in the short term. In my opinion, I expect that travel reopening may not be perfect in the short term but I am optimistic that this form of cash flow for Rolls-Royce should be resuming sooner rather than later. Lack of news Another issue behind the share price of Rolls-Royce is likely to be the fact there has been no important news from the company recently. The lack of news is a possible factor in the share price with no catalyst to get shareholders excited about.  Underlying investment case hasn’t changed From a month ago there has been no real change in the prospects of Rolls-Royce, with the future climate looking the same and global travel still expected to improve and get back to normal. I am bullish on Rolls-Royce and see the drop in the last month as a buying opportunity for investors. With the world starting to open up – and it will do further in the coming months – this is only going to benefit Rolls-Royce. Of course in the short term, things may change but the long term should see the shares in the company increase in value. I am seeing the current price as a great buying opportunity and a great discount to investors. The risk to the share price Many investors will remain wary of Rolls-Royce at the moment and for good reason. The reason for this is the lack of control the company has in its own success at the moment. The success of the company going forward is heavily reliant on the pandemic and restrictions across the UK and the world easing. However, in the long term, the Rolls-Royce share price should recover its recent losses, which is why I am very bullish on the company. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Hargreaves Lansdown investors are buying Rolls-Royce shares. Should I buy too? How much is the Rolls-Royce share price really worth? Will the Rolls-Royce share price fly this summer holiday season? Can the Rolls-Royce share price bounce back? Will the Rolls-Royce share price soar in May? Ed Jones owns shares in Rolls-Royce. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price has fallen. Is now the time to buy? appeared first on The Motley Fool UK.
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  12. Should I buy Rolls-Royce shares for my portfolio today? (25/03/2021 - The Motley Fool UK)
    It seems that everywhere I look, people are talking about Rolls-Royce (LSE: RR) shares, and so I’m not surprised to see that it is one of the most popular traded companies in the UK right now. Up until mid-March, the Rolls-Royce share price had soared by almost 25%. However, since then the company’s shares have almost given up those gains, falling more than 17% as of market close on March 24. Over the last 12 months, they are down by almost 25% at the time of writing. However, I agree with my Foolish colleague Christopher Ruane that the Rolls-Royce share price will reach 150p this year, but following this dip, should I buy the stock for my portfolio today? Why are Rolls-Royce shares falling? Its share price began declining immediately following its full-year 2020 financial earnings release earlier this month, which revealed that: Total sales fell 24% to £11.8 billion. Total losses accrued to £4 billion. It suffered a £1.7 billion finance charge. I wasn’t too surprised to see that things hadn’t gone very well for the aerospace company. After all, its biggest business segment, Civil Aerospace, took a nosedive thanks to Covid-19-induced travel restrictions. This is still a major risk for Rolls-Royce shares going forward, as there is no guarantee that life will return to normal any time soon (although these two top FTSE stocks that I’m buying before the summer will certainly be relying on such an event). However, with major European markets such as Germany and France reporting rising coronavirus cases in the past month, there is a very real threat to Rolls-Royce’s share price if the situation should deteriorate. Should I buy the stock? I don’t think that Rolls-Royce shares will be able to stage a major comeback this year if lockdown restrictions and vaccination levels don’t go as currently planned, which is far from guaranteed, so I am under no illusions that I am taking a risk by adding it to my portfolio. But I am going to take that risk anyway as Rolls-Royce’s share price continues to fall. Call me an optimist, but I’m still hopeful that widespread reopenings and some return to normalcy will return as 2021 drags on. And, at the end of the day, the company is still one of the world’s leading manufacturers and maintenance providers for aircraft engines — a job that I believe will be in high demand when reopenings come. What excites me in relation to the Rolls-Royce share price is the amount of maintenance that will be required once more planes get back in the air. To put how important this maintenance revenue is for Rolls-Royce into perspective, the company sold £3.2 billion of civil aircraft engines in 2019 but recorded a further £4.9 billion in service revenues for the sector. Even in 2020, with Covid-19 severely limiting flights worldwide, service revenues came in at £2.8 billion. Even taking away the fact that the company’s defense revenue actually grew by 4% to £3.4 billion last year, I expect the Rolls-Royce share price to grow even further when the thousands of currently grounded planes around the world suddenly need inspections before hitting the skies once more. I think that Rolls-Royce shares are a bargain for my portfolio today. as I expect its share price to grow as normality returns.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price reach 150p this year? Can management use technology to boost the Rolls-Royce share price? Can the Rolls-Royce share price surge if it overcomes this huge trend? Rolls-Royce shares are nudging higher. Should I buy now? Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 Jamie Adams has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Should I buy Rolls-Royce shares for my portfolio today? appeared first on The Motley Fool UK.
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  13. What’s going on with the Rolls-Royce share price? (12/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) is in a funk. Again. The Rolls-Royce share price is trading at below 100p levels today after managing to hold up above these levels for much of the past month.  Much progress for Rolls-Royce This is mystifying. The outlook for aviation is better now than it has been at any time in the past year. Supply and service of civil aircraft engines is Rolls-Royce’s biggest revenue source, so that is good news. Also, its other business segments are in a healthy place.  And Rolls-Royce also has plans in place for the future. It is in the process of forming a partnership with Cavendish Nuclear, an engineering company, to facilitate the development of Rolls-Royce’s small nuclear power plants. In another bid to support clean energy, the company is also set to launch the fastest electric plane.   To me, these look like developments with great potential as we move towards a cleaner, greener future. Whether or not they add to the company’s bottom line remains to be seen, but for now that is tomorrow’s question. Why the share price drop? So why the drop in share price? I think one glaring reason is that the pandemic continues. It is true that vaccinations are happening speedily. It is also true that the intensity of Covid-19 has declined. However, it is equally true that coronavirus cases are on the rise. And while we are all looking forward to ‘Freedom Day’ next week, there is also a possibility that restrictions may come back after the summer. The worst affected from this ongoing uncertainty, is of course the aviation sector.  It is no coincidence then, that Rolls-Royce is hardly the only aviation related stock to decline in the recent months. FTSE 100 airline giant International Consolidated Airlines Group and the FTSE 250 low-cost airline easyJet, are other casualties of this uncertainty.  With constant change in expectations, I can see why investors appear undecided about the Rolls-Royce share price. I had predicted as much, when I wrote about it in May. My takeaway was that its situation is volatile, and that is how it has stayed. Even though by last month, it was beginning to look like I might have been wrong. What would I do now? So what would I do about the Rolls-Royce stock now? I think it is a wait and watch situation for now. Unlike airline stocks, I have been particularly cautious about Rolls-Royce because even pre-pandemic its financial performance left a lot to be desired. So even if all goes back to normal, there is limited confidence in the company’s performance. This will also translate into limited share price increases.  Instead, if I want to buy stocks in the aviation pack, I think the likes of easyJet are a better buy for me. As a low-cost airline its bounce back can be faster.  The post What’s going on with the Rolls-Royce share price? appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Can the Rolls-Royce share price rise in the months ahead? Rolls-Royce shares: 1 reason to buy and 1 reason to sell Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? This is what I’m doing about the Rolls-Royce share price Manika Premsingh owns shares of easyJet. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  14. Can the Rolls-Royce share price rise in the months ahead? (12/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has followed a disappointing trajectory over the past few years. Climbing to 130p near the end of 2020, it seemed the stock may have been gaining momentum. However, this was not the case. Currently sitting at 97p, the Rolls-Royce share price has hovered around the 100p mark for most of 2021. It’s up only 6% year-on-year and this raises the question: can the share price rise higher over the next few months? Rolls-Royce share price problems The pandemic hit Rolls-Royce hard. The firm was forced to cut 7,000 jobs in the face of a £4bn loss for 2020. Rolls makes most of its money servicing aeroplane engines, but with the travel industry grinding to a halt during the pandemic, business dried up. This forced the company to issue 6.4bn new shares in October 2020. While this raised £2bn, it halved the value of the share price, vastly reducing the earnings per share. 2020 was a bad year for Rolls-Royce, but the firm was experiencing problems even before the pandemic. In 2019, problems with its Trent 1000 engines forced the firm to fork out nearly £800m. This raised the total cost of Trent 1000 engine setbacks to £2.4bn for 2017-23. These expenses put a huge strain on free cash flow, something the firm could not afford going into the pandemic. Results dependent On 5 August, Rolls will be publishing its half-year results. This will offer investors insight into the future direction of the business. The firm itself has set out several targets for the last six months of 2021 and for 2022. These include turning free cash flow positive by the end of 2021 and achieving annualised savings of over £1.3bn by the end of 2022. The half-year results should give investors a closer idea of the progress of these targets. If targets are looking achievable, I believe we will see positive growth in the Rolls-Royce share price. However, these targets are heavily reliant on the increase of engine flying hours. If travel problems linked to the pandemic persist, it could vastly reduce the likelihood of these targets being reached. Will the shares climb higher this month? I expect the August results will be a good indication of the direction of the Rolls-Royce share price in the coming months. However, this month’s share price will rely on a broader range of factors. The UK is set to abandon all Covid-19 restrictions on 19 July. If this is pushed back (again) it will likely hinder any immediate Rolls-Royce share price growth. In addition to this, in an interview with Bloomberg this month, Engineering and Technology Director Simon Burr asserted his optimism in moving beyond the Trent 1000 jet engine problems. Encouraging statements like this are great for investors’ confidence and could help drive up the Rolls-Royce share price. I think it’s hard to say if the share price will rise in the immediate future. It has shared its plans to overcome 2020 problems and the August results should highlight the probability of these targets being achieved. If the results bring good news, I think we could see a rise in the Rolls-Royce share price immediately afterwards and in the coming months. The post Can the Rolls-Royce share price rise in the months ahead? appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Rolls-Royce shares: 1 reason to buy and 1 reason to sell Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Dylan Hood has no positions in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  15. The Rolls Royce share price is below 100p – so is it a buy? (20/07/2021 - The Motley Fool UK)
    I have to say that whenever the Rolls-Royce (LSE: RR) share price is below the rather arbitrary 100p per share level, I’m tempted to look into whether buying the shares is worthwhile. Well, that’s the case right now. At the time of writing the shares have dipped to around 90p. Hard to imagine that five years ago, the shares were 250p and at the start of 2020 they were 233p. A lot has changed since then. Are there reasons for optimism? One of the biggest potential reasons to be cheerful has to be around the resumption of travel. With many Britons double vaccinated, holidays could be back on the cards. Although restrictions in other countries and slower progress in long-haul destinations like Australia may hold back progress towards travel resuming as normal anytime soon. Rolls-Royce is likely to accelerate away from a reliance on commercial airlines and exciting new technologies like modular nuclear power stations, as well as more work in the defence industry, could make earnings more reliable and stable. Given how badly the shares have done, there’s the paradox that any good news – especially any pleasant surprises – could well see the Rolls-Royce share price do well. I suspect expectations are now so low that there could be significant upside. The CEO has been at Rolls-Royce since 2015, so there’s a steady hand at the helm. At this difficult time a settled and competent management team is absolutely vital and I think it’s reassuring to any investor. Once the worst of the pandemic is over Roll-Royce can once again target better cash flow. All that said, its chair is set to change later on this year, but hopefully by October we’ll be starting to see more air travel and Rolls-Royce getting off its knees. The bad news for the Rolls-Royce share price It’s much easier to find bad news. Revenues are unlikely to recover to anywhere near normal levels soon. In 2022 it’s forecast revenues will still be significantly below where they were in 2015. The company has been loss-making for the last few years and margins have fallen through the floor. Not all the problems with the Rolls-Royce share price can be blamed on the pandemic. Remember, the Trent engine problems meant the engineer was hemorrhaging money before anyone had heard of Covid-19. For now, given it makes so much money from how many air miles planes fly, Rolls-Royce remains at the mercy of the pandemic. Would I invest? That’s why on balance I think there are better investments than Rolls-Royce out there. Given the challenges the company faces, I think buying the shares is a gamble and one I’m personally unlikely to take. But if the shares dip even further, I may reconsider that view as a rather contrarian long-term investment. The post The Rolls Royce share price is below 100p – so is it a buy? appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading Can the Rolls-Royce share price recover in 2021? 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Will the Rolls-Royce share price keep falling? How low can the Rolls-Royce share price go? The Rolls-Royce share price falls again! Here’s what I’m doing about it Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  16. 5 reasons to buy Rolls-Royce shares – and why I’m not (22/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has had a bumpy ride over the past year. While it is flat relative to its price a year ago, in the interim it has sunk to 39p and reached as high as 135p. That’s a lot of movement. With Rolls-Royce shares now in penny stock territory, here are five reasons I’d consider buying the company today – and why I have still not decided to purchase just yet. 1. Civil aviation demand is returning One of the key drivers for the decline in the Rolls-Royce share price since the pandemic began has been its exposure to civil aviation. That isn’t just about selling engines, though that is important. It is also about servicing them. The less planes fly, the more infrequently they need to be serviced – which hurts the company’s revenues and profits. Civil aviation demand is in recovery mode in key markets. If that continues, it should improve the outlook for the civil aviation business – and Rolls-Royce shares. 2. The defence business is resilient Civil aviation is not the only part of Rolls-Royce’s business. Another important revenue stream is its defence division. Last year it accounted for 29% of the company’s total underlying revenue – and it grew. The growth was 4%, which amid the impact of the pandemic was a solid performance in my view. The defence business also grew its underlying operating profit to £448m – the biggest of any Rolls-Royce division. Defence spending tends to be resilient, and I think last year’s performance helps make that point. 3. Cost cutting should show benefits Part of the company’s plan last year to combat the impact of falling business was to strip costs out of the business. Last year it reckoned it saved £1bn compared to what it had planned before the pandemic set in. The company is targeting operating costs and capital spend savings of £1.3bn by the end of next year. That is a large saving and ought to improve the company’s profit margins. One risk, though, is cutting the wrong costs. Reputation is vital to an engineering firm like Rolls-Royce, and if cost cuts lead to lower quality standards, that could damage the company’s future sales. 4. Rolls-Royce shares and cash flow One concern about the company is its liquidity position. Last year it secured a mammoth £7.3bn of additional liquidity, meaning that coming into this year it had £3.5bn in cash and £5.5bn in undrawn credit facilities. The company has repeatedly said that it expects to turn cash flow positive in the second half of 2021 – which is the current half. If it is able to do so, investors may focus more on its future income earning potential rather than fret about its liquidity. 5. Falling Rolls-Royce share price At just 96p, Rolls-Royce shares are now trading at a 25% discount to where they stood in the spring. But arguably the outlook now is more positive than it was then. I’m not buying Rolls-Royce shares yet Despite all that, I’m not buying Rolls-Royce shares yet, in the absence of firmer signs of sustained recovery. The company’s management has underwhelmed me for years. But what most puts me off is the liquidity needs of such a huge industrial operation. Part of last year’s fundraising involved a highly dilutive rights issue. That’s a risk when – not if – the next cyclical crisis comes along. The post 5 reasons to buy Rolls-Royce shares – and why I’m not appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading Are these 2 FTSE 100 travel stocks a bargain? Would I buy Rolls-Royce shares at 8-month lows? The Rolls Royce share price is below 100p – so is it a buy? Can the Rolls-Royce share price recover in 2021? 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  17. The Rolls-Royce share price is crashing in April! Should I buy RR today? (21/04/2021 - The Motley Fool UK)
    As a value investor, I love bottom fishing, whereby I trawl through crashed share prices looking for ‘fallen angels’. These are otherwise sound companies whose shares have steeply declined. In March 2020’s market meltdown, dozens of FTSE 100 companies were in this category. So my wife and I invested all of our cash into shares a year ago, with spectacular returns since. But while bargain-hunting in the Footsie today, I spotted an unfamiliar face: Rolls-Royce Holdings (LSE: RR.). Alas, the Rolls-Royce share price has had a bad week (and month). The Rolls-Royce share price crashed in 2020 At its five-year peak, the Rolls-Royce share price topped 375p in August 2018. However, it had a tough 2019, closing the year at 234.45p. Then Covid-19 shut down air travel worldwide and air miles flown collapsed by at least 80%. This destroyed the share prices of airlines and their suppliers, including RR. Thus, the Rolls-Royce share price had a bad time last year. At the low of 2 October 2020, RR shares closed at a mere 38.98p. That’s a loss of over 195p, with the shares crashing by more than 80%. Rolls-Royce rockets from October 2020 Happily, over the past seven months, Rolls shares have soared. From early October, the Rolls-Royce share price staged an almighty comeback. With news arriving after Halloween of several Covid-19 vaccines, RR shares boomed. On 3 December, they closed at 134.90p (up almost 96p), for a whopping 246% gain in just two months. Clever or lucky buyers of RR shares at the October low would then be sitting on almost 3.5 times their money. Wow. Since December, the Rolls-Royce share price has eased back, but rose to close at 127.20p on 17 March. Since then, it’s been on a bit of a downer and, recently, the Rolls-Royce share price has dropped significantly. Over one week, it is down 7.8%, putting it at #99 in the FTSE 100. Over one month, it has dived 15.2%, the worst performance in the Footsie. Ouch. Would I buy Rolls-Royce shares at under £1? This decline brings to mind one of my favourite Ben Graham quotes. The ‘father of value investing’ advised, “A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price”. Do I like Rolls-Royce Holdings as a business? You bet. As a multinational aerospace and defence company around since 1904, it has a storied history. It designs, manufactures, and sells world-class power systems for aviation and other industries. But the collapse in air travel clobbered the Rolls-Royce share price. As I write, it trades at 99.9p on Wednesday afternoon. I would buy big with the Rolls-Royce share price below £1, if not for one worry. In order to survive 2020, RR raised huge sums in bonds and loans, thus bashing its balance sheet. RR’s net debt (including leases) of £3.6bn is approaching half of its market value of £8.4bn. But the company has £3.5bn in cash and £5.5bn in undrawn credit to ride out future storms. Although this debt mountain scares me, I lack any potential growth stocks in my family portfolio. On balance, I’d take a small punt today on Rolls-Royce getting back on track from 2022 onwards! FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Does the Rolls-Royce share price make me want to buy in 2021? 2 ways the Rolls-Royce share price could benefit from the reopening economy Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is crashing in April! Should I buy RR today? appeared first on The Motley Fool UK.
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  18. Why is the Rolls-Royce share price falling? (10/02/2021 - The Motley Fool UK)
    Over the last month or so the Rolls-Royce (LSE: RR) share price has fallen nearly 15%. That’s worse than the 5% of the FTSE 100. Over 12 months the fall is 60%. So why have the shares continued to fall? Should investors be worried?  Reasons for the Rolls-Royce share price decline New variants of Covid are a source of concern. Although the UK is doing well with the vaccine rollout, many other countries are struggling and there are supply constraints, as the EU/AstraZeneca row highlighted. And the UK, South Africa and Brazil variations have all reignited pandemic concerns. That has implications for travel and, by extension, for Rolls-Royce. A January trading update from the engineer has probably also weighed on the share price. The company revised down forecasts for widebody engine flying hours to 55% of 2019 levels from a 70% estimate last October. It added to this by saying that it expected to lose £2bn in cash as a result. Cashflow was something it was looking to improve, so the setback, while understandable in the context of Covid-19, is still disappointing. Yet emerging technologies like modular nuclear power and electric aircraft could offer a way forward for Rolls-Royce and boost the shares.  But for now, the virus dictates the future of the Rolls-Royce share price. The company can invest in nuclear, marine and other industries to offset some of the aviation losses, but investors (including me) still seem concerned about the company’s flying prospects in the short term, at least. What I plan to do about this potential value share I’m also a little concerned. Even in light of the Rolls-Royce share price being cheaper than it was a month ago and far less than it was a year ago, I’ll avoid the shares. For me they carry too much risk, and a recovery is too fragile. In some ways RR resembles a value share, as it has fallen so much in the wake of challenging trading conditions and the its poor financial performance. With multiple problems to contend with, I’d rather invest in some shares with strong growth potential, rather than the volatile Rolls-Royce share price. An alternative FTSE 100 share One share that I’d rather invest in is the high-yielding insurer, Aviva (LSE: AV). A new CEO is slimming down the business, which should make it easier to manage, and perhaps even attract a takeover from a larger company. That’s happened within the industry, for example with RSA Insurance, so there is a precedent. The shares have a dividend yield of 3.79% and it also seems to show signs of being good value with a P/E of just five.  As a financial share it was particularly hard hit in the sell-off about 12 months ago. That means there’s plenty of room for a share price recovery if the economy improves, I think. On the downside there’s a risk it could underperform if the economy remains weak. Also, its disposals mean it’s now more reliant on the UK and Ireland for earnings so any poor performance here could hurt the share price.  Overall though, I’d prefer to add Aviva shares to my portfolio as the Rolls-Royce share price still looks very volatile.   FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading I think the Rolls-Royce share price could benefit from this potential trillion dollar market Why I think the 94p Rolls-Royce share price could double my money Rolls-Royce share price has declined almost 30%. Here’s what I’d do The Rolls-Royce share price: here’s what I’d do right now The Rolls-Royce share price has fallen again. Should I buy the stock now? Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Why is the Rolls-Royce share price falling? appeared first on The Motley Fool UK.
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  19. Why is Rolls-Royce a penny stock? (13/07/2021 - The Motley Fool UK)
    With Rolls-Royce (LSE: RR) trading below a pound, the famous engine maker is now a penny stock. But the Rolls-Royce share price traded higher just a couple of months ago – and I think it could go up again. Turbulence for the Rolls-Royce share price Concerns about demand for air travel meant that companies heavily exposed to it, such as Rolls-Royce, were hard hit after the pandemic started. The shares were climbing earlier this year, but have shed a quarter of their value since their mid-March highs. They are now up just 4% over the past year. There are a number of reasons for that. One reason is the inconsistent pace at which air travel demand is coming back. With each setback, such as delays in lifting restrictions, investors fret about the prospects for Rolls-Royce. That has hit the Rolls-Royce share price. A second reason is the company’s liquidity. It massively boosted liquidity last year. But it did so at the expense of existing shareholders, through a heavily dilutive rights issue. While I think the company currently has ample liquidity, the proven risk of dilution could be dampening enthusiasm for the shares. Quality on the cheap Often, penny stock status suggests concerns about a company’s future business prospects. Undoubtedly a decline in demand for aircraft engine servicing has hit Rolls-Royce hard. Last year it booked a £3.1bn loss. With demand for air travel still significantly below pre-pandemic levels, there is a risk that weakened revenues in the company’s core engines business will weigh on profits again this year – and perhaps beyond. But there are signs of longer-term resilience in the air travel market, including large aircraft order from major airlines. Only a few global aircraft engine makers of scale exist, and Rolls-Royce is one of them. That alone ought to help it return to financial health in future. Add to that the fact that the company isn’t just reliant on civil aviation – and its other business divisions have held up fairly well during the pandemic. So while the Rolls-Royce share price may languish beneath the pound mark for a while yet, I don’t expect it to stay there forever. Where next for the Rolls-Royce share price While I see potential for a higher Rolls-Royce share price, a key question is: what will be the driver to move it? One possible factor could be the release of the company’s interim results, due next month. Rolls-Royce has repeatedly said it expects to become free cash flow positive in the second half of this year. An update on that target at the time of the interim results could lead to a rerating of the shares, either positively or negatively. The effects of the company’s cost savings programme ought also to show up more clearly now than it did before. If it looks like it has cut out costs without damaging Rolls-Royce’s reputation with customers, that could also provide a boost to the Rolls-Royce share price. For now, however, I continue to watch from the sidelines. I do not plan to buy Rolls-Royce shares in the absence of clear evidence of strong, sustained business recovery. The post Why is Rolls-Royce a penny stock? appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading What’s going on with the Rolls-Royce share price? Can the Rolls-Royce share price rise in the months ahead? Rolls-Royce shares: 1 reason to buy and 1 reason to sell Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  20. Rolls-Royce earnings: here’s what will help me decide to buy more shares (10/03/2021 - The Motley Fool UK)
    FTSE 100 stock Rolls-Royce (LSE:RR) will release its earnings report on Thursday 11th March at 9am. It is well expected that the company will report its biggest annual loss in history and go into depth about the detrimental impact the Covid-19 pandemic has had on the business. Nonetheless, I think there might be light at the end of the tunnel for Rolls-Royce shares. Here are the main reasons why I am re-entering Rolls-Royce albeit tentatively, as I think there is a chance that we see a positive rise of the share price after earnings. Rolls-Royce is expected to report its biggest loss ever The market is already expecting the company to have its biggest ever loss on record so that isn’t likely to spook the share price if it is indeed reported. In fact, International Airlines Group recently reported a loss of £7.5 billion and its share price rose 3.5%; I am hoping that we might see something like that for Rolls-Royce’s shares. Reasons the stock could rise I am hoping that the management comes out speaking upbeat on its recovery, especially in terms of its aerospace division. This division manufactures and services engines for the airline industry and makes up 50% of the company’s total earnings. Therefore, with the vaccination roll-out going better than expected in the UK and improving globally, this is positive for Rolls-Royce’s main revenue stream especially as more airlines are now travelling than they did in the fourth quarter. Additionally, I hope we hear more from management about this and that they provide upbeat guidance for the rest of the year, especially with foreign holidays from the UK set to be allowed from 17th May. Reasons Rolls-Royce shares could fall A key metric to focus on will be its liquidity position (cash). During the pandemic, the management team reacted quickly and raised money from a rights issue. They also took measures to cut-costs to make the business leaner, which I think has only made the company a more attractive proposition if it can survive this pandemic. However, if we were to hear that Rolls-Royce may need to do another round of financing, or if it raises concerns about its cash position being able to survive a longer-than-expected recovery, this could send the share price falling. Why I am buying Nevertheless, although the shares have recovered somewhat, they are still significantly down from Rolls-Royce’s pre-pandemic levels of over 600p. That’s why I think now, before its FY earnings, is a great chance to get into this stock. Therefore, I am buying more shares in this global brand in the hope of a boost after earnings, but I will be holding a little bit of money back in case a ‘buy the dip’ opportunity presents itself instead. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price is rising. Should I buy shares now? Tesla has fallen 35%. How I think it affects the Rolls-Royce share price The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today Joseph Clark holds shares in Rolls-Royce. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce earnings: here’s what will help me decide to buy more shares appeared first on The Motley Fool UK.
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  21. Should I buy Rolls-Royce shares today? (06/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) is a popular stock at the moment. Last week, RR was the most purchased stock on both Hargreaves Lansdown and AJ Bell Youinvest. Should I buy Rolls-Royce shares for my own portfolio? Let’s take a look at the investment case for the FTSE 100 stock. Rolls-Royce shares: two reasons to be bullish  I can see a few reasons to like Rolls-Royce shares right now. For starters, the stock is a classic ‘reopening’ play. Rolls-Royce generates a large proportion of its revenues from the servicing of jet engines. So the company should benefit as the world reopens and the travel industry picks up. Recently, it said it’s positioned well for the rebound in international air travel. It’s worth noting that in June, analysts at Jefferies listed Rolls-Royce as one of their top picks for the ‘post-pandemic growth cycle’. With economic activity picking up, Jefferies expects some companies to embark on a period of bonanza, and Rolls-Royce is one of them. And Jefferies isn’t the only brokerage that likes Rolls-Royce shares at present. Recently, Berenberg listed the stock as a ‘buy,’ saying that significant restructuring across the aerospace sector driven by the pandemic will create opportunities for investors. “Despite the delayed recovery in air traffic, demand signals are firmly positive,” its analysts wrote in a research note. Another reason to like Rolls-Royce is that it’s working hard to become a more ‘sustainable’ company. Last month, the company outlined plans to reach net zero emissions by 2050 by investing more in decarbonising technologies and, in the short term, using more sustainable aviation fuel. To ensure it reaches that target, the company plans to lift its research and development spending on low carbon and net zero technologies to 75% of its total budget by 2025, from around 50% now. Meanwhile, on 30 June, Rolls-Royce announced it will be partnering with oil giant Shell to work on the development of sustainable aviation fuel, in line with both their plans for net zero emissions by 2050. The pair signed a memorandum of understanding (MoU) which Rolls-Royce said would help with plans to certify 100% sustainable aviation fuel (SAF) for use in planes. It’s also worth pointing out that Rolls-Royce appears to be progressing with its high-performance electric aeroplane. The company recently said we can expect to see the first flight in the coming weeks. Is RR a good long-term investment? I do have one big concern about Rolls-Royce shares however, and that’s the company profitability track record. It was having problems with its profitability well before Covid-19. In 2016, for example, it generated a net loss of £4bn. What stands out to me is that Rolls-Royce’s five-year average return on capital employed (ROCE) figure is -3%. That’s very poor. History shows companies that generate low returns on capital are generally not good long-term investments. Rolls-Royce shares: should I buy? I think Rolls-Royce shares could have some upside in the short term as the world reopens. However, as a long-term investor, I’m looking for more than short-term gains. Given its historically low ROCE, I’m not convinced RR is a good stock to own for the long term. So I’m going to leave the shares alone for now. I think there are better stocks to buy. The post Should I buy Rolls-Royce shares today? appeared first on The Motley Fool UK. Like this one… FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Where will the Rolls-Royce share price go in July and beyond? Rolls-Royce shares are below 100p. Should I buy? The Rolls-Royce share price: 3 things that could give it a boost Should I buy FTSE 100 shares BP or Rolls-Royce for my ISA in July? Top British stocks for July Edward Sheldon owns shares of Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  22. Rolls-Royce shares: is it the right time to buy? (25/02/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares are down around 50% in the past year. However, investors who bought the stock during the lows in October have seen their investment grow three times.  The company derives around 50% of its revenue from its civil aerospace segment. This is the reason investors became increasingly cautious about the stock last year. However, the hopes of a positive Brexit deal in October and also the successful raising of capital by the company helped the stock price recover. I would like to understand the pros and cons of investing in this company. Rolls-Royce fundamental analysis Rolls-Royce released its trading update at the end of January. Full-year 2020 free cash flow was in line with the management guidance. They were expecting free cash outflow of approximately £4.2bn for the year 2020.  In my opinion, the company has done well in handling the negative impact of Covid-19 on its business. It was able to achieve more than £1bn in cost savings in 2020. It has set a plan of £1.3bn in cost savings by 2022. Its liquidity position is good, with approximately £9bn at the end of 2020. This figure is at the upper end of the company’s guidance. This liquidity is another reason why I like Rolls-Royce shares. In its December trading update, the company reported that its power systems end markets were seeing some early signs of improvement. Its defence segment business is strong. It has a good order book and 2021 forecast sales are covered. The increase of the UK defence budget is also expected to bode well for the company’s long-term growth.  The Rolls-Royce company has a wealth of technical expertise. In the future, it might enter the air taxi market. My colleague Jay Yao believes that the company has a lot of potential in future aviation technologies.  Risks to consider investing in Rolls-Royce shares It is too early to know exactly the total negative impact of the Covid-19 pandemic on Rolls-Royce. Many companies might have deferred payments which they will have to cover once the market opens up. There is a lot of optimism after Prime Minister Boris Johnson announced the gradual lifting of restrictions. However, there is no guarantee that the full lockdown will be lifted by June. If the lockdown does need to be extended, the company’s 2021 revenue might also fall drastically. This would have a negative impact on the Rolls-Royce share price. Fitch Ratings has downgraded Rolls-Royce’s long-term issuer default rating (IDR) and senior unsecured rating to ‘BB-‘, with the outlook as negative. This is will further increase the interest costs when the company raises debt. The company had a net cash position at the end of 2019 but is expecting a net debt position of £1.5bn to £2.0bn at the end of 2020. The company’s free cash flow forecast for the year 2021 is a cash outflow of £2.0bn. This is based on 2021 widebody flying hours at around 55% of 2019 levels. However, the company expects free cash flow to improve in the second half of 2021, which is positive. Rolls-Royce shares are currently trading at a price-to-sales ratio of 0.64. I understand that there is a lot of uncertainty for the company this year. However, I believe the shares are undervalued and would like to buy the shares this year.  “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Rolls-Royce share price: have we seen the bottom? Rolls-Royce share price is around 100p. Here’s what I’d do Rolls-Royce shares: should I buy? Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet Royston Roche has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: is it the right time to buy? appeared first on The Motley Fool UK.
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  23. The Rolls-Royce share price has fallen. Should I buy? (28/04/2021 - The Motley Fool UK)
    Shares in Rolls-Royce (LSE: RR) have been falling. The Rolls-Royce share price has tumbled 20% from its high last month. Over the past year, the shares have fallen 7%. Below I consider why this might be. I also explain my next move. Reopening prospects mixed Over the past year, the shares have tended to do well when there is optimism about a return to international travel. That is because a large part of the company’s business relies on aircraft engines being used. The more they are used, the greater the demand for servicing. Recently, news about reopening has been mixed. There has been a lifting of some restrictions in the UK, for example. But other markets like India may see fewer flights in the near future. The focus on the timing of broad reopening is important. The sooner flight traffic returns to normal, the sooner the company should be able to staunch its negative cash flow. But I think it is something of a red herring. When assessing the Rolls-Royce share price, I find it helpful to focus on the broad pathway to flight resumption, rather than just a granular calendar view. I expect travel to continue reopening overall even if the progression isn’t smooth. So I am optimistic that Rolls-Royce can return to free cash flow generation. Lack of control Another mitigating factor for the Rolls-Royce share price in my opinion has been the lack of any strong news from the company lately. That reflects the fact that the key drivers for improved performance are external to the company. The directors can’t accelerate the demand for flights, no matter how beneficial that would be for the company. Underlying investment case unchanged Sometimes the stock market generates a lot of noise. Compared to a month ago, I don’t think the future prospects for the Rolls-Royce share price have changed much. The company has not reduced its forecasts. The tough cost controls announced last year continue to take effect. The company still expects to stop bleeding cash in the second half of this year. So if I was bullish about the Rolls-Royce share price prospects, I would see the recent fall as a buying opportunity. I still think the shares could reach 150p this year, as I previously explained. That would be a 45% increase from today’s price in a matter of months. Yet I do not plan to take advantage of the recent share price fall. Why not? Risks to the Rolls-Royce share price The main reason I remain wary of buying Rolls-Royce shares is the lack of control I explained above. Currently the business prospects are mostly hostage to events. That means that even if the company makes its best efforts to prosper, the speed and scale of any recovery is substantially driven by external factors. The main factor is the resumption of flights at close to pre-pandemic levels. While I do expect that to happen at some stage, the timing remains unknown. Delays constitute further risk to the Rolls-Royce share price. I do think the share price could recover its recent losses and more. But for now, I am hunting for other shares that I think are less susceptible to demand shocks. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: what’s in store in the coming months? As the Rolls-Royce share price falls, I’m still buying Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price has fallen. Should I buy? appeared first on The Motley Fool UK.
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  24. The Rolls-Royce share price is rising. Should I buy shares now? (10/03/2021 - The Motley Fool UK)
    Shares in Rolls Royce (LSE: RR) have moved around a fair bit lately. The share price is up 10% so far this year. In this past month alone it’s put on 20%. That performance hasn’t been enough to get the Rolls-Royce share price back to where it was, though — it’s still 40% lower than this time last year. Here I will look at why the share price has been rising and consider whether I ought to add Rolls-Royce to my portfolio right now. The Rolls-Royce share price received a vaccine boost The company’s recent share price increase has coincided with growing vaccination roll out. As an aeroplane engine maker and servicer, the company’s fortunes are tied to demand for air travel. Rising vaccination rates ought to see more countries ease travel restrictions. That is good for Rolls-Royce, as the greater utilisation of engines, the higher the demand for servicing. However, while vaccination rates are rising, air travel is still nowhere near its normal level. The company clearly expects demand to increase. It said it should be cash flow positive in the second half of this year. However, its prior estimate of how fast air travel would return was adjusted downward. I think it is too early to say with any certainty whether air travel demand will actually come back to anything close to normal levels even by the end of this year. The company has substantial liquidity so should be able to ride out the storm even if it doesn’t turn cash flow positive in the second half. But that liquidity has come at a cost, most notably a large dilution of shares in last year’s rights issue. The challenge to the Rolls-Royce share price isn’t just about demand from airlines. I think it also reflects some investor nervousness that the company’s much-enlarged share float reduces the benefit to the shares even if the business does recover fully. Hunting for better options I find some aspects of the investment case for Rolls-Royce persuasive. It has a well-admired engineering expertise and reputation. The aircraft engine market is expensive and difficult to enter, so players like Rolls-Royce have a position of strength. Its installed base of engines virtually guarantees service revenues for years and sometimes decades to come, although a demand shock such as a future pandemic could affect them. In that sense, the company comes close to having the sort of economic moat Warren Buffett appreciates. But the pandemic has shown up some weaknesses in the company’s business model too. It is highly sensitive to demand, which is largely outside its control. Even with budget savings such as the elimination of 7,000 positions last year, the fixed costs of developing and servicing plane engines are high. That is one reason I think the Rolls-Royce share price is still well below its former level, even after the recent increase. Life getting back to normal will improve business prospects for the company. But for pandemic recovery picks I am more attracted by pub operators like J. D. Wetherspoon or transport companies like Go-Ahead. Their structural economics appeal to me more than those of Rolls-Royce, and demand recovery could come faster than it may for the aero engines market. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Tesla has fallen 35%. How I think it affects the Rolls-Royce share price The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising. Should I buy shares now? appeared first on The Motley Fool UK.
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  25. Rolls-Royce shares are below 100p. Should I buy? (30/06/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares have caught my eye as they’ve fallen below 100p. So far this year the stock has decreased by over 4% and is flat the past 12 months. So should I buy now at the current level? Well, I’ve been bullish on the company for some time and I’d use this opportunity to snap up some shares. Why have Rolls-Royce shares been falling? A significant portion of Rolls-Royce’s revenue is derived from civil aerospace. This is where it delivers and services aircraft engines. So naturally, any negative news regarding travel restrictions is going to hit the stock. The Delta coronavirus variant has been spreading across the UK and there are concerns that countries will start to to restrict travel for any visitors coming from here. This clearly doesn’t bode well for the travel industry and has cast doubts on when the sector will resume any kind of normality. So just when I thought that sentiment towards travel was improving, investors are worried about the implications of rising Covid-19 cases in the UK. This uncertainty has hit Rolls-Royce shares. The positives I don’t think all is lost though. There are a few reasons why I’m bullish about the company.We have a new health secretary, Sajid Javid, right in the middle of another wave of rising Covid-19 cases. And yesterday, he confirmed that the UK remains on track for ‘Freedom Day’ on 19 July. Also, the green list of countries that people can fly to has been expanded. This is encouraging news and I don’t think should be overlooked. While the number of coronavirus cases is increasing, I’m glad that the number of fatalities remains very small. The vaccines appear to be working and the continued rollout of the jabs should be positive for Rolls-Royce shares. Of course there’s no guarantee Freedom Day will happen. A further rise in Covid-19 cases could result in its date being pushed back further. This would mean that the travel industry may experience another lost summer like last year. This would hit the engine maker’s revenue and could impact the share price negatively. Broker view As I mentioned, I’m upbeat about Rolls-Royce shares. And investment bank Berenberg named the stock one of its ‘key picks’ in civil aerospace earlier this month. In fact, the analysts argued that the deep restructuring should drive bigger operating margins within three to five years in comparison to pre-pandemic levels. If this does happen, it could mean that Rolls-Royce has emerged out the crisis in better shape. It kept its ‘Buy’ rating from Berenberg with an unchanged price target of 150p. My view I don’t expect it to be smooth sailing for Rolls-Royce, but I reckon there’s light at the end of the tunnel for the company. I agree with Berenberg that the cost-cutting will help and means that it’s operating from a low base. This should work in the firm’s favour and hence, I’d buy the stock. The post Rolls-Royce shares are below 100p. Should I buy? appeared first on The Motley Fool UK. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Rolls-Royce share price: 3 things that could give it a boost Should I buy FTSE 100 shares BP or Rolls-Royce for my ISA in July? Top British stocks for July Can the Rolls-Royce share price maintain its momentum? The Rolls-Royce share price is up 170%. Should I buy now? Nadis Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  26. The Rolls-Royce share price is rising this week. Should I buy? (18/02/2021 - The Motley Fool UK)
    For years, I’ve liked Rolls-Royce (LSE: RR), but I’ve never got around to buying. Whenever the time came for me to make an investment, Rolls never quite made the top of my list. Maybe the Rolls-Royce share price looked a bit too high at the time. Or, more usually, there’s just something else I liked better. Warren Buffett famously spoke of investing in Gillette, and the warm feeling he got every morning when he thought of the millions around the world shaving with a new blade. I’ve always had similar feelings watching airline departures and arrivals. And thinking of all those lucrative maintenance contracts bringing in the cash for Rolls-Royce. But no comparison is perfect. Chins are still being shaved around the world during Covid lockdown. But the planes aren’t flying, and the Rolls-Royce share price has suffered. We’ve seen a modest climb this week though. Since market close last Friday, Rolls-Royce shares are up 8%, as I write. But I’d never make an investment decision based solely on short-term share price moves. And the bigger picture isn’t so pretty. Feeling bullish We’re close to a year on from the start of the Covid-19 stock market crash. And, in that year, the Rolls-Royce share price has fallen 58%. But it had been slipping even before that. Over the past two years, Rolls-Royce shares are down 70%. So we’re looking at a pandemic catastrophe on top of an existing downward trend. So why am I starting to feel positive towards the stock? Well, my reason is essentially that I still see the long-term business as sound. When Rolls-Royce will get back to profit, I really can’t guess. And I still expect the rest of 2021 to be rocky for the Rolls-Royce share price. Then there’s the huge amount of debt the company’s had to take on, amounting to around £4bn now. That will have to be addressed some day. But, for now, the key question is whether Rolls will make it through the rest of this crunch year. The firm’s latest update at the end of January essentially said things are in line with expectations. Rolls expects free cash outflow of around £2bn in 2021, and I could see a few eyes watering at the prospects of that. But at the end of 2020, the company had around £9bn in liquidity — which it described as “at the upper end of the previously guided range.” Rolls-Royce share price cheap? Rolls-Royce is hoping for an upturn in the aviation business in the second half of the year. And that’s where I think the big risk lies. The Covid vaccination programme is progressing reasonably well. But there almost seems to be a new virus variant every week. And the government is still urging against booking fly-away holidays just yet. Still, with the Rolls-Royce share price around £1, or less, I really am tempted to buy. But I still don’t know whether I will. Again, it’ll depend on what other options might look more promising when the time for my next purchase comes along. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising this week. Should I buy? appeared first on The Motley Fool UK.
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  27. Rolls-Royce shares: 1 reason to buy and 1 reason to sell (11/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) was one of the companies hardest hit by last year’s stock market crash. It didn’t really partake in the late 2020 recovery either. And the Rolls-Royce share price is still down around 65% over the past two years. Pandemic meant lockdown, lockdown meant nobody flying. Nobody flying meant no aircraft engine maintenance. Well, there was some, but well below normal levels. But with the end of Covid restrictions moving ever closer, many are heading off on their hols again. And that’s my chosen reason I’d think of buying Rolls-Royce shares. In a recovery situation, I want to see a troubled company’s business starting to pick up again. Or, at least, strong indications it’s about to happen any day now. I’m hoping we’ll see some hard evidence of recovery with first-half results, due on 5 August. Rolls-Royce share price: ready for the rebound? I think we might see a spark of interest in the Rolls-Royce share price in the days leading up to that. But in the meantime, I’m buoyed by the firm’s AGM statement from May. Chief executive Warren East said: “Looking ahead, we are confident that the significant restructuring actions we have taken in 2020 will deliver permanent cost reductions, positioning us well for the rebound in international air travel.“ So we have a leaner and more cost-efficient Rolls-Royce now, and that’s maybe not a bad thing anyway. I’ve always liked the company ,and from this direction it looks like a ‘buy’. But what’s the other angle, and why might I rate it a sell? In a word, cash. Rolls-Royce needed to take on a whole new financing deal just to keep going. Part of that involved raising around £2bn from disposals. But the company also raised £7.3bn from new debt and equity. That was in a year that resulted in a pre-tax loss of £2.9bn, and a free cash outflow of £4.2bn. Share price valuation Those are scary, scary numbers. And they make all previous valuation metrics utterly meaningless. With the degree of restructuring that’s been needed, we’re essentially looking at an an entirely new version of Rolls-Royce now. And it’ll surely take some time for markets to settle on a sensible long-term valuation. It’ll definitely take me some time to work out where I think the Rolls-Royce share price should be. I can’t see things settling this year. The company said it’s targeting positive free cash flow in the second half of 2021. And it hopes to reach at least £750m by 2022. If that comes off, my confidence will be boosted. But there’s still significant risk here. And my biggest fear is that the cash could run out and Rolls-Royce might need further financing. If that happens, a resulting combination of more debt and more equity dilution would throw all valuation measures further up in the air again. Hopefully, we’ll get a clearer idea of how the financial picture is looking once we have those H1 figures. Until then, I’m just watching. The post Rolls-Royce shares: 1 reason to buy and 1 reason to sell appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Where will the Rolls-Royce share price go in July and beyond? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  28. Rolls-Royce share price: can it go back up to 200p? (12/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) faced big challenges in 2020, and its full-year results released Thursday only confirm that. Interestingly though, the Rolls Royce share price has risen, presumably on the news.  Why the Rolls-Royce share price is up I think the Rolls-Royce share price rose for two reasons.  One, poor results were already priced in. Support services to aviation is the big revenue source for RR. Since travel in 2020 was restricted, RR was bound to feel the impact. The company’s updates have been reflecting this. So have weak trends in the Rolls-Royce share price.  Two, times are changing. The worst of the pandemic now seems to be behind us. And travel is expected to be back soon. Rolls-Royce will be back in business, because of this.  Optimism about this recovery is evident in RR’s outlook. It says “Looking ahead over the next couple of years….we expect the rebound in global GDP and lifting of travel restrictions to drive our recovery”.  According to the International Monetary Fund, global growth will be 5.5% in 2021 after a fall in world output in 2020. It is expected to rise by another 4.2% in 2022.  This can bode well for RR, which expects hours flown by its engines to increase to 80% of the levels seen in 2019 by 2022. This is a big jump in the 55% levels expected for 2021.  Why the RR share price can cross 200p This is somewhat encouraging and I think it can increase RR’s share price further. The Rolls-Royce share price is presently at 115p, which is already an increase of around three times from the lows we saw last year.  I think it may well be possible now that the RR share price can rise back up to its pre-pandemic levels of 200p and above. Besides the improving environment for RR and its outlook, I think there are two other reasons it can happen.  One, other coronavirus and lockdown impacted stocks like Lloyds Bank and Cineworld have recently seen a jump in their share prices back up to pre-pandemic times. For investors still looking for post-market crash bargains, RR is still among them. Two, the US government just passed a massive fiscal stimulus of $1.9trn. If these funds are indeed spent in the manner intended — to improve infrastructure and economic wellbeing that creates higher consumption — we could see a boom in US growth. This in turn, will impact the rest of the world positively. Moreover, it could mean another stock market rally, which could raise share prices across the board, including the Rolls-Royce share price.  A word of caution Much can still go wrong. The pandemic is not over. The threat of coronavirus variants still lurks. Further, RR’s financials are weak and will take their own time to recover. This adds to the fact that RR was in an uncertain place even earlier.  Attractive as the Rolls-Royce share price might look for the near future, I would consider the downside too before making a long-term investment in the stock. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares The Rolls-Royce share price is rising. Should I buy shares now? Tesla has fallen 35%. How I think it affects the Rolls-Royce share price Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: can it go back up to 200p? appeared first on The Motley Fool UK.
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  29. The Rolls-Royce share price is under £1: should I buy today? (17/02/2021 - The Motley Fool UK)
    After hitting a high of 135p in early December, shares in aero engine maker Rolls-Royce Holdings (LSE: RR) have slumped due to the impact of renewed lockdown restrictions. Rolls-Royce’s share price has fallen by more than 25% since 3 December, to under 100p. On a 12-month view, Rolls shares have now fallen by nearly 60%. Ouch. Are Rolls-Royce shares a potential bargain? My colleague Graham Chester thinks they might be. I agree. But if I bought the shares today, I’d expect a rough ride before the company returns to reliable profitability. Here’s why. What’s the worst that could happen? I think it’s fair to say that many people underestimated the impact of the coronavirus pandemic. I think most businesses were unprepared too. They had not planned for a scenario where their revenue streams would be shut off by a health emergency and subsequent government action. I’m not here to discuss the politics of this situation. But the reality is that in 2021, Rolls-Royce expects to record engine flying hours that are 45% lower than in 2019. No business can be expected to shrug off such a big loss. Rolls expects to see a cash outflow of £2bn this year, despite cost-saving measures. Can things get worse? Rolls-Royce is banking on a recovery in flying hours during the second half of the year. But I don’t think we can be sure of this just yet. One risk I can see is that countries will return to normal this summer but might keep their borders closed for longer to protect against new virus variants. Why I think the stock could be cheap One challenge for Rolls-Royce is that it doesn’t make much money from selling its jet engines. Profits mostly come from after-sales servicing and support. In normal times, this business generates plenty of cash. This is the key to my belief that Rolls-Royce shares could be cheap at their current price. If I buy the stock, I’ll mentally write off 2021. Anything could happen and I expect the firm’s results to be awful. But from 2022 onwards, I believe the business should be operating pretty much as normal. At that point, I think the changes being made by CEO Warren East should start to deliver results. Rolls-Royce’s own forecasts suggest that it could generate surplus cash each year (known as free cash flow) of £750m “as early as 2022”. I reckon that hitting this target would make the business look cheap at current levels, with a price-to-free cash flow ratio of just 2.5. Rolls-Royce share price: my view I think Rolls-Royce’s valuation reflects a couple of risks for potential shareholders like me. The first is simply that the outlook is still very uncertain. A return to normal is not yet in sight. The second risk is probably more serious, in my view. Rolls-Royce has taken on around £4bn of new debt over the last year to help it survive the pandemic. At some point this borrowed cash will need to be repaid. However, even when I include the impact of Rolls’ increased borrowings, my sums tell me that at a share price of £1, Rolls-Royce could be a good addition to my long-term holdings. I’ve not decided whether to buy Rolls-Royce just yet. But this business is now on my watch list of shares to consider buying. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Rolls-Royce share price: could the company be a Tesla competitor in the future? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is under £1: should I buy today? appeared first on The Motley Fool UK.
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  30. The Rolls-Royce share price is above 100p: what next? (16/03/2021 - The Motley Fool UK)
    In the last six months, the Rolls-Royce (LSE: RR) share price has been as low as 40p per share and as high as 140p. Now back above the possibly important psychological marker of 100p, would I add the engineer’s shares to my portfolio? What’s happening with the Rolls-Royce share price? It’s worth noting that although the shares have increased a lot over the last month, over a longer timeframe they’ve performed poorly. In 2018, the shares reached 375p. In early 2014 they were over 400p. Even comparing Rolls-Royce to another engineer like Weir Group or Melrose, shows that its share price has underperformed. Weir and Melrose have made gains over the last 12 months, while Rolls-Royce has lost ground.   That could either mean Rolls-Royce could bounce back stronger, or that there are just greater concerns about the company versus other broadly comparable businesses. I fear it may be the latter. Yet the last month has been a bit stronger. This momentum has, I think, more to do with the rotation to value stocks over growth stocks, rather than specifically a vote of confidence in Rolls-Royce itself. More than just a temporary blip Covid only amplified problems that Rolls-Royce had. It wasn’t firing on all cylinders before the pandemic, as I have pointed out before. There were issues with cash flow and its Trent 100 engines, to give just two examples. Neither of these can easily be ignored, they are pretty major problems.  Even as Covid fades, and we have a roadmap in the UK out of lockdown, there’s still a lot of uncertainty around the engineer. Its wide-body planes will likely be less in demand for now, even as air travel increases. That’s because I’d suspect most people will likely take short breaks until they feel comfortable flying long-haul again. That means lower demand for bigger planes.  The impact of the pandemic will likely hurt its cash flow for years too. This year it’s expected to spend £4.2bn. Turning this situation around will take a lot of management time and require a lot of action, including likely further cost-cutting.  Those issues with the Trent 100 engines are still not fully resolved and have been eating up profits even before the pandemic. It’s hard to quantify what impact this has on the firm’s reputation, but it can’t do the brand any good.  What could help boost the shares? On the flipside of this gloomy picture we have both short-term and long-term opportunities. In the short term, the share price could benefit from being seen as a Covid recovery share. Longer term, reliable defence income and moving into new emerging technologies, such as modular nuclear reactors, could boost growth and investor sentiment. In the end the simple answer to the question of whether I’d add Rolls-Royce shares to my portfolio is probably not. For me there are other Covid recovery stocks that are better value and that could make for more profitable long-term holdings. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is above 100p: what next? appeared first on The Motley Fool UK.
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  31. Rolls-Royce share price is around 100p. Here’s what I’d do (22/02/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price has likely reflected the recent battle between Covid-19 vaccines and variants. Initially, the Pfizer vaccine candidate news really beat efficacy estimates in November and the Rolls-Royce share price rallied. Later, Covid-19 variants spread and made the prospect of a fast recovery in civil aviation more distant. The Rolls-Royce share price fell as a result. With the Rolls-Royce share price now close to the 100p level and everything that’s happened, here’s what I’d do. Vaccines versus variants In the battle between the vaccine and the variants, it’s not the end of the world for Rolls-Royce. While the spread of Covid-19 variants has slowed the recovery in civil aviation, the company still expects to turn cash flow positive at some point in the second half of 2021, according to a trading update released earlier in the year. Management is also confident that they are well positioned for the future given the company’s liquidity of around £9bn. At its current stage, I reckon the Covid-19 vaccines are getting a slight upper hand on the variants. Production of Covid-19 vaccines has ramped up higher and the number of new cases has fallen in many parts of the world. If the number of new cases continue to decline sharply, there is the possibility that civil aviation recovery expectations could increase and this could potentially benefit the Rolls-Royce share price. There could also be hope in the future against variants. Companies like GlaxoSmithKline and CureVac are, for instance, working on multivalent mRNA Covid-19 vaccine candidates that could target variants more effectively. The two companies, which are working together, hope to bring a multivalent product onto the market next year. If the late stage results of those multivalent vaccine candidates are positive, I reckon that civil aviation recovery expectations could increase. With this said, Covid-19 is constantly mutating and there is potential for a new strain to hinder civil aviation more than expected. As a result, the Rolls-Royce share price could always decline. Rolls-Royce share price: what I’d do Given the current information on Covid-19 variants and the current Rolls-Royce share price, I’d buy shares. Making quality and dependable jet engines is one of the hardest things in the world to do. It takes a lot of engineering know-how that I think gives Rolls-Royce a potential competitive advantage in future growth sectors. I think civil aviation will eventually recover and RR could be a good investment as a result. I could be wrong, however, if a new Covid-19 variant spreads and becomes a big problem. I’d also follow the annual result report next month, particularly when it comes to future guidance (if management provides any). If Rolls-Royce beats the market’s real estimates on earnings or guidance, I could see how the stock could go higher. I could also see the stock going lower if the results are underwhelming. I’d also be interested in how the company’s planned sale process of ITP Aero is going. I reckon a higher than expected sale price could help the stock. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce shares: should I buy? Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price is around 100p. Here’s what I’d do appeared first on The Motley Fool UK.
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  32. Are these 2 FTSE 100 travel stocks a bargain? (21/07/2021 - The Motley Fool UK)
    The FTSE 100 took a huge hit on Monday, losing £44bn in value as fears of a worldwide Covid-19 resurgence sparked a mass sell-off. The index fell 2.3%, closing at 6844.4, its lowest closing point since April. Travel stocks were hurt the most, down 3.5% to levels not seen since last year.  Two of the biggest losers were Rolls-Royce (LSE: RR) and International Consolidated Airlines Group (LSE: IAG). They have regained their losses over the past two days, but are still near historic lows. The Rolls-Royce share price is currently 97p, down from 1,088p in August 2018, while the IAG share price is 171p, down from 726p in June 2018. With international travel still up in the air, is the tremendous potential for growth in these stocks worth the risks? A brighter tomorrow The majority of Rolls-Royce’s revenue comes from its global reputation as a builder and repairer of civilian aircraft. A price recovery to the giddy days of 2018 is dependent on a strong recovery of the civilian aviation sector. This will be almost entirely down to how the global coronavirus situation develops over the next couple of years. While the Rolls-Royce share price is down 20% in the last month alone, there is reason to be optimistic. In the UK, every adult has been offered a first vaccine dose, with all restrictions lifted from 19 July. The situation is moving in Europe and the USA, but at least half of adults have had their first dose.  There are risks though; the company has been selling off assets to improve its financial position. In December, it sold its civil nuclear business to Framatome. In February, it sold Bergen Engines to TMH Group. It is currently trying to sell its 50% stake in AirTanker, a military aircraft provider. The plan is to release £2bn of equity into the business to help weather the ongoing storm. I think the key question is whether aviation restrictions end before Rolls-Royce runs out of money. If all goes well, international travel could bounce back sharply, with a corresponding share price increase. If not, the share price could sink even further. I think the risks of buying this FTSE 100 company could be worth the reward in the long term. Come fly with me IAG is the owner of both British Airways and Aer Lingus. Even more than Rolls-Royce, its recovery is entirely Covid-19-dependent. Although ‘Freedom Day’ came two days ago, the UK is still in the middle of a ‘pingdemic.’ One quarter of schoolchildren are off school, and employers have branded the current self-isolation rules ‘unworkable.’ Even with relatively high vaccination rates, the UK requires vaccinated French tourists to isolate. Meanwhile, vaccination rates abroad are still too low to facilitate mass air travel, with most countries still hostile to the idea of regular tourism.  I don’t think the numbers are looking good. IAG lost over one billion euros in the first quarter of this year alone. The second quarter earnings report is coming up next week, and it seems likely that a similar loss will be incurred. Yesterday it lost a court bid to force the UK government to explain how it justifies coronavirus rules restricting air travel. Even as a FTSE 100 stock, the uncertainty is too much for me to buy right now. The post Are these 2 FTSE 100 travel stocks a bargain? appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Would I buy Rolls-Royce shares at 8-month lows? The Rolls Royce share price is below 100p – so is it a buy? Can the Rolls-Royce share price recover in 2021? 3 reasons why the IAG share price has crashed 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Charles Archer has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  33. I’d buy Rolls-Royce shares despite the big 2020 loss (17/03/2021 - The Motley Fool UK)
    I’ve been bullish on Rolls-Royce (LSE: RR) shares for sometime. Last week the FTSE 100 stock released its 2020 full-year results and I can’t say I was too surprised with what the company reported. I think most of the bad news is out in the open for Rolls-Royce shares. And from here, the company and share price are likely to recover so I’d buy the stock. But here’s what I drew from its recent results. Big hit 2020 wasn’t a great year for Rolls-Royce. Revenue and profitability took a big hit. In fact, total sales were down 24% to £11.8bn. The company also suffered a £4bn loss over the year, which included a £1.7bn finance charge. To be honest, I’m not shocked by the big negative numbers. Investors knew Rolls-Royce’s situation was struggling last year and understandably so given the pandemic. It’s no surprise to me that the Civil Aerospace division suffered the worst impact. Rolls-Royce’s largest business took a nose-dive because of Covid-19 travel restrictions. Its revenue just dried up, which was reflected in the results. But I’ll stop with the negative news now and turn to the reasons why I’d buy Rolls-Royce shares. Liquidity Last year, Rolls-Royce took big steps to improve its liquidity position. It raised money through a rights issue and put further credit facilities in place. So at the end of its 2020 financial year, Rolls-Royce had access to a grand total of £9bn in liquidity, including £3.5bn in cash and £5.5bn in undrawn credit. It expects a cash outflow of £2bn in 2021. This is weighted towards the first half of the year before Rolls-Royce expects cash flow to turn positive at some point in the second half of this year. What I take from this is that the company has enough money to weather the storm in the short term. By my calculations, there’s a wiggle room of £7bn in liquidity provided that things continue as expected. Power Systems & Defence divisions The Power Systems and Defence divisions held up well last year. Both businesses accounted for 23% and 29% of Rolls-Royce 2020 full-year revenue respectively. I’ve mentioned this before, but the Defence business provides Rolls-Royce with some revenue stability and visibility. So I’m not surprised, given that revenues took a hit in 2020, that the Defence division accounted for a larger portion of sales. In 2019, this same division only accounted for 20% of revenue. What I think is pleasing to see is that the Defence business has 90% order cover for 2021. The company also predicts steady growth from this division into the medium term. My view Rolls-Royce is highly dependent on the lifting of travel restrictions and the vaccine rollout. Any delays or setbacks mean a further impact to revenue and profitability. This could also place pressure on liquidity and it may need to raise more money, which would be negative for the shares. I recognise that the recovery from the pandemic will take time and I don’t think the dividend will resume any time soon. But I’m still optimistic about the prospects for Rolls-Royce shares. I think the worst is over for the company and hence I’d buy now. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post I’d buy Rolls-Royce shares despite the big 2020 loss appeared first on The Motley Fool UK.
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  34. Hargreaves Lansdown investors are buying Rolls-Royce shares and IAG. Here’s what I’d do (30/03/2021 - The Motley Fool UK)
    Rolls-Royce Holdings (LSE: RR) shares were the most popular choice with investors on share trading platform Hargreaves Lansdown last week. British Airways owner International Consolidated Airlines Group (LSE: IAG) wasn’t far behind, in second place by value. Both companies are ‘reopening stocks’, which depend heavily on air travel getting back to normal over the next year. I’ve been wondering whether I should buy one of them for my portfolio, or whether it’s too late to get on board this trade. What happens next? The IAG and Roll-Royce share prices have both risen by more than 100% from the lows seen in early October. Vaccine news in November put a rocket under these stocks, as it did with many others. Despite these gains, both Rolls-Royce and IAG are still trading at share prices 50% lower than in January 2020. At first glance, this might seem cheap. But I don’t think it is. The reason for this is that both companies have taken on extra debt and issued large numbers of new shares over the last year. They’ve been focused on survival. But as a potential investor, I’m focused on dilution. What this means is that from 2021 onwards, Rolls’ and IAG’s profits will be split among many more shares than in the past. This means that earnings per share will be much lower, even if profits return to pre-pandemic levels. The extra debt these companies have taken on also worries me. Debt payments always come ahead of shareholder dividends. These payments will now be bigger than they were before the pandemic. I think it could be a while before IAG and Rolls-Royce can start to pay attractive dividends again. Rolls-Royce shares vs IAG: what I’d buy The other concern I have as a potential buyer is whether these are really good businesses. Airlines have a long history of boom and bust. But before the pandemic, many investors — even Warren Buffett — were starting to think things might be different now. It turns out they aren’t. Airlines still have high fixed costs that are difficult to manage when demand is disrupted. And they still face very tough competition from multiple rivals. Mr Buffett ditched his airline stocks early last year when the likely impact of the pandemic became clear. In my view, Rolls-Royce is a better business than IAG. This is because Rolls-Royce offers essential products with few competitors and a large base of existing customers. These customers are tied into Rolls on long-term maintenance contracts. When flying restarts, airlines will have to start spending money with Rolls-Royce again. To sum up, I don’t think Rolls-Royce shares or IAG shares look particularly cheap today. But if I did invest, I’d certainly choose Rolls. I think the engine maker is much more likely to deliver attractive long-term returns for shareholders. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price: amazing value for my ISA? 2 aerospace stocks I’d buy Rolls-Royce shares: Norway blocks its sale. Should I be worried? Should I buy Rolls-Royce shares for my portfolio today? Will the Rolls-Royce share price reach 150p this year? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Hargreaves Lansdown investors are buying Rolls-Royce shares and IAG. Here’s what I’d do appeared first on The Motley Fool UK.
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  35. Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today (04/03/2021 - The Motley Fool UK)
    A one-year time frame is a good benchmark when I look at an investment return. It doesn’t mean I’ll sell after one year, but enough time has passed for me to see the general trend of the stock. Judging a company over a shorter time might lead me to make the wrong call on the stock. One example is Rolls-Royce (LSE:RR) shares. One-year performance  A year ago, Rolls-Royce shares were trading at 208p. As I’m writing, the share price is 115p. From this I can clearly see that a £1,000 investment is worth less now than it previously was. In numerical terms, it’s down 45%, so my £1,000 would be worth approximately £550. As a rough barometer, the FTSE 100 index over this period is down as well. However, it’s down less than 3%, so Rolls-Royce shares are underperforming the benchmark. This move lower doesn’t appear to be a one-off. If I look back two years, the share price was at 305p. There have clearly been fundamental drivers that have caused the value of the company to decrease over the past few years.  One of these has been the “tangible and sustainable cultural and performance shift” that was reported in the 2019 results. Rolls-Royce had focused on repositioning the business in several key areas. This meant cutting headcount (seen in both 2019 and 2020) as well as trying to reduce net debt (gross debt reduced by £1.1bn in 2019). This understandably meant Rolls-Royce shares took a knock, as trying to transform a mature company will hurt in the short run before investors see the benefits. Another hit to Rolls-Royce shares came due to Covid-19 last year. The impact was felt in most industries, but particularly in the aerospace sector. Demand for maintenance of engines and new engine sales in the civil aerospace area dried up. Although demand in other areas (such as defence) held firm, Covid-19 definitely took its toll. Should I buy Rolls-Royce shares now? I could look at Rolls-Royce shares and think that the downward trend might continue. However, there comes a point when the share price simply can’t fall lower unless the business is looking like it will go bust.  In its latest trading update, Rolls-Royce confirmed it has £9bn of liquidity available. So I don’t think the business is remotely close to going under in the short term. Therefore, I do see Rolls-Royce shares as an opportunity for me to buy in. But before I do, I’d like to see the full-year 2020 results that are due out on March 11. Besides any major disaster, I’ll buy after results come out. I imagine the commentary with the results will stress caution, but could look ahead with optimism. Based on the vaccination numbers, flying hours should increase in H2, which indirectly will benefit Rolls-Royce. Ultimately, I don’t see air traffic (either civil or otherwise) remaining depressed in the long term. So this should gradually mean a return to sustainable profits for the business. The issue here though is simply the risk of the unknown. If more virus mutations surface or lockdowns are prolonged, Rolls-Royce shares will likely continue to trade lower. However, I can’t predict this, and have to accept this as a risk. But with this in mind, I’d still buy the stock. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today appeared first on The Motley Fool UK.
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  36. Here’s why I’m avoiding Rolls-Royce shares (22/06/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares have not being doing too well lately. At the time of writing, shares in the engine maker stand at 107p. This is far below their pre-pandemic price of 235p and more than 75% below their highs of 436p in 2014. What happened? The effects of the pandemic are primarily responsible for the recent poor performance of Rolls-Royce shares. Global lockdowns have left air traffic at record lows. In turn, this has led to a steep decline in the demand for aircraft engines. This has hurt Rolls-Royce significantly as engines for commercial and business aircraft is its biggest source of revenue. Such a decline in demand was reflected in the poor performance of the company’s civil aerospace business segment, which generated just £5.1bn in 2020 compared to £8.1bn the year prior. Overall, revenues in 2020 declined 29% year on year from £16.5bn to £11.8bn. This performance translated to the bottom line with Rolls-Royce recording a loss of £3.4bn and a massive free cash outflow of £4.2bn. Light at the end of the tunnel? There is some positive news, however. Last year, the company announced a restructuring of the company designed to save £1.3bn. This should help the company reduce its losses in the near term. It also raised £7.3bn by selling new shares and issuing more debt. By doing so, the company has boosted its liquidity position making the prospect of near-term financial distress much less likely. There are also reasons to be optimistic about a recovery in the future. As the world becomes more vaccinated, the end of the pandemic is getting closer. When it does finally end, air traffic should recover to pre-pandemic levels, which should boost the demand for Rolls-Royce’s engines. In such a scenario, Rolls-Royce should recover strongly. Indeed, management are optimistic with their outlook. They estimate that the company will be free cash flow positive by the second half of this year and are targeting a positive free cash inflow of £750m in 2022. Am I buying Rolls-Royce shares? Despite these positive factors, I will not be adding Rolls-Royce shares to my portfolio. This is for a number of reasons. Firstly, any recovery in the demand for aircraft engines may take years. Eurocontrol, an air traffic control body, predicts that air traffic will not recover to pre-pandemic levels until 2024 at the earliest. Such a slow recovery means that the demand for Rolls-Royce’s engines will likely remain at depressed levels for a while. Secondly, the pandemic has left the company in a much worse position than it was before. In order to fund the huge cash burn, the company has had to issue a large amount of debt. Currently, the company has a net debt position (total debt less cash) of £3.6bn. This is huge for a company that is currently losing money. Lastly, the company was already struggling before the pandemic. This is demonstrated by the fact that the company failed to turn a profit in three of the five years leading up to the pandemic. This does not give me confidence for the long-term future of the company. For these reasons, I am not looking to buy Rolls-Royce shares any time soon. The post Here’s why I’m avoiding Rolls-Royce shares appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Why is the Rolls-Royce share price having such an uncertain June? What’s going on with the Rolls-Royce share price? Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Ollie Henry has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  37. Rolls-Royce share price: what’s in store in the coming months? (26/04/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) was one of the biggest losers of the stock market crash caused by Covid-19 last year. What is ahead for the Rolls-Royce share price in the coming months, and is there an opportunity here for me to pick up cheap shares? Rolls-Royce share price woes Between February 2020 and September 2020, the Rolls-Royce share price lost 80%. Across the whole of 2020, the Rolls-Royce share price declined by over 50%. Its debt levels rose as it borrowed to keep the lights on, and it also cut jobs and announced a rights issue to generate cash flow. In December, the Rolls-Royce share price experienced its highest post-Covid-19 price. Shares were trading for 135p per share. Since that time, however, the share price has fallen over 20%.  Challenges and outlook ahead Airlines are operating more than at this time last year. The issue here is that Covid-19 is still rife and there could be further restrictions if another wave hits. In terms of Rolls-Royce, I believe the overall outlook is improving. I do believe, as I write, the worst of the crisis is over. It has taken the necessary steps to see it through some tough times and has begun to shore up its once-beleaguered balance sheet. There are still some challenges it needs to overcome, however. In a recent trading update, Rolls-Royce predicted a free cash outflow in the region of £2bn in 2021. This is money that is going out of the business that its management team will need to find from somewhere. In the same update, it did mention its £9bn liquidity, which is a good sign in my opinion. This should help with the cash outflow mentioned. The Rolls-Royce share price could benefit in the future if ambitions are achieved. It believes it can generate over £700m of free cash flow by 2022. This is a projection based on past figures and flying hours of engines. Cash is king and this could put Rolls-Royce in a much better position.  My verdict I believe there is lots of recovery potential linked to the Rolls-Royce share price. The issue I have is that this recovery is linked to Covid-19. I don’t think it can handle another scenario whereby planes are grounded and it faces severe losses. It must be noted that different parts of the world are in different states related to the virus. The US seems to be flourishing from an aviation perspective and is a market Rolls-Royce can capitalise on. Asia is struggling right now with a deadly variant, and there seems to be another lockdown on the horizon over there. I believe the current Rolls-Royce share price is not reflective of its improving stature, and I think it will creep up over the coming months. I class it as a high-risk investment but I think it is priced quite low right now. It could make an interesting recovery play for my portfolio. Right now, I would not invest in Rolls Royce shares but will keep a keen eye on developments.  Away from Rolls Royce, here is a tech stock that recently underwent an IPO that I have examined. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading As the Rolls-Royce share price falls, I’m still buying Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? Does the Rolls-Royce share price make me want to buy in 2021? Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: what’s in store in the coming months? appeared first on The Motley Fool UK.
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  38. I’d avoid the Rolls-Royce share price and buy this FTSE 100 stock instead (26/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has been one of the big losers of the pandemic. However, as the economy has reopened, some investors have been buying the FTSE 100 company as a recovery play.  I’ve also considered buying the stock as a recovery play, albeit a speculative recovery play. As one of the world’s largest manufacturers of engines for the civil aviation industry, the company is well-placed to benefit from the recovering aviation market. That’s the theory anyway. In practice, there’s a lot that could go wrong. Even if passengers return to the skies in large numbers, the company may still struggle to remain consistently profitable. This would undoubtedly be bad news for the Rolls-Royce share price.  This is why it’s incredibly challenging to value the stock. Despite the group’s reputation and scale, it’s consistently struggled over the past few decades to live up to its potential. It might be different this time around, although there’s no guarantee.  With this being the case, I’ve been looking for other companies in the industrial sector that might be a better buy than Rolls.  An alternative to the Rolls-Royce share price According to the latest information, sectors seeing the fastest growth as the economy reopens are construction and manufacturing. I think that suggests equities in the industrial and construction sectors could be the best investments for me to own right now. As such, while I’d avoid the Rolls-Royce share price, I would buy shares in FTSE 100 peer Melrose (LSE: MRO) as an alternative.  These two companies couldn’t be more different. As Rolls has lurched from one disaster to another, Melrose has achieved a strong track record of buying struggling industrial companies, turning them around, and selling them for a profit.  The company’s latest is the £2.6bn disposal of its Nortek Air Management Division. After this sale, the enterprise will be returning £730m to shareholders. Following this special dividend, the company will have paid out £5bn to shareholders since its listing in 2003. At the time of the listing, the business was valued at just £10m. It is worth more than £7bn today.  As Melrose has created value, the Rolls-Royce share price has destroyed it. Shares in the FTSE 100 company have fallen 78% since reaching an all-time high of 437p at the end of 2013.  FTSE 100 investment I’m well aware that industrial companies can be volatile. Melrose has been successful, but past performance should never be used as a guide to future potential. The company could face challenges from higher interest rates and rising costs as we advance.  However, what excites me is the company’s management, which has a tremendous amount of experience buying, turning around and selling businesses. Is in my opinion, Melrose’s management is its best asset.  That’s why I’d buy Melrose over Rolls today. Even though Rolls may see a recovery in the weeks and months ahead, I’d rather have exposure to Melrose’s management, which seems to be one of the best in the business.  The post I’d avoid the Rolls-Royce share price and buy this FTSE 100 stock instead appeared first on The Motley Fool UK. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. 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More reading Can the Rolls-Royce share price hold out until the end of 2021? 5 reasons to buy Rolls-Royce shares – and why I’m not Are these 2 FTSE 100 travel stocks a bargain? Would I buy Rolls-Royce shares at 8-month lows? The Rolls Royce share price is below 100p – so is it a buy? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Melrose. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  39. Rolls-Royce shares: should I buy? (22/02/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares have had a lot of attention lately, but the stock has been falling. So if it has taken a hit, is now a buying opportunity? I think so and I’d buy Rolls-Royce shares in my portfolio.  Civil Aerospace I can’t deny that Roll-Royce’s main business, the Civil Aerospace division has been severely hit by the coronavirus pandemic. I think what makes it worse is that revenue from this business accounts for over 50% of the company’s total earnings. But what does the Civil Aerospace division do? In a nutshell, it manufactures and services engines for the airline industry. So it’s no surprise that it has been hit by the pandemic. Global restrictions have meant little travel travel, thereby having a knock-on effect on the need for Rolls-Royce’s services. Now that there’s a mass vaccination programme under way, I expect air travel to start recovering slowly. I reckon there’s pent-up demand for people to holiday abroad. This in turn should start having a positive impact on Rolls-Royce shares. In its December trading update, Rolls-Royce reported that the Civil Aerospace business is gradually recovering. The number of large engine flying hours at the time was 42% of 2019’s level. While no one can predict the shape and timing of the recovery in air traffic, Rolls-Royce expects travel to pick up in the second half of 2021. By this time, I’d expect vaccines to have been rolled out a significant portion of the UK and global population Liquidity During the coronavirus crisis, Rolls-Royce improved its liquidity position. It raised money from a rights issue, and secured additional loans, as well as drawing on its existing cash reserves. Rolls-Royce took further measures by implementing cost-cutting measures and disposing of certain assets. To me, these steps have not only made the firm leaner but have also strengthened the balance sheet. According to its latest update, Rolls-Royce has access to £9bn in liquidity. It forecasts £2bn in cash outflow for 2021. For now, I reckon it can weather the storm and I’d buy the shares. Risks I think the biggest risk right now facing Rolls-Royce share is that no one knows how long this pandemic and restrictions will persist for. If this crisis drags on, this may place a strain on the business and liquidity reserves. Furthermore, if air travel doesn’t pick up in the second half of 2021 then Rolls-Royce may have to raise further capital. Another round of financing may not be well received by investors and could impact the share price. Defence business Clearly, I don’t think all is lost with Roll-Royce shares. I believe investors have become fixated on the company’s Civil Aerospace business and have forgotten that it has other divisions as well. In fact, I’d like to highlight its Defence business, which accounts for 20% of earnings. What I like about Rolls-Royce shares is that the defence business throughout the pandemic has been resilient. The company has defence contracts with the UK and US governments. It also has a strong order book and 2021 forecast sales are well covered. For now, I’m happy with the stable revenue visibility from this division.  “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: should I buy? appeared first on The Motley Fool UK.
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  40. Can someone give me their best bearish thesis on RYCEY. (04/04/2021 - Reddit Stocks)
    I’m already holding a large position long on Rolls Royce RYCEY, I believe strongly that they are just beginning their way back up from the bottom of a 5yr. low. I have read a lot of great PR in regards to innovations and developments they’re working on including the largest lightest turbofan engine ever made that will be 25% more efficient than its predecessors. Rolls Royce are invested in space travel as well as supersonic commercial flight for the future. I just want to hear a bearish argument other than the current state of civil aviation which is a main source of revenue for them as to why they won’t be 5x-10x in the next 2-3 years... Annnnd Go!   submitted by   /u/TJspring47 [link]   [comments]
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  41. Can the Rolls-Royce share price recover in 2021? (20/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has been falling. In fact, the stock is currently trading below 90p. But despite the recent fall, I’m optimistic that the Rolls-Royce share price can recover in 2021. I’d buy the stock on this dip. Here’s why. Why is the Rolls-Royce share price falling? In short, Rolls-Royce has exposure to the civil aviation space. It makes most of its money from selling aircraft engines and servicing them. And so if people are travelling less this will impact the company’s revenues. It’s pretty simple to understand why the share price fell last year. The pandemic caused a lot of uncertainty. But the same is happening again. Up until a month ago, the stock was recovering. But Covid-19 case numbers are on the rise in the UK again, driven by the Delta variant. Hospitalisations and deaths are also increasing, but thankfully not at the same rate. Couple this with restrictions being eased and this has created uncertainty in the markets. In fact, the FTSE 100 index was down over 2% yesterday, which highlights that investors may be thinking that the UK government is opening up the economy too soon. Another lockdown hasn’t been ruled out and it has caused a degree of uneasiness. Of course, this is going to impact travel-related stocks and Rolls-Royce is one of them. It doesn’t help when Health Minister Sajid Javid is having to self isolate after testing positive for Covid-19. At the same time the UK Prime Minister and Chancellor are having to isolate as well. So should I buy? I’m worried that the number of coronavirus cases are rising. And I reckon the number could rise further now that the economy has reopened. Of course, this is going to have a knock-on effect on the Rolls-Royce share price.  But for now I’m encouraged by the fact that the number of hospitalisation and deaths aren’t increasing as fast as case rates. On this basis, I’d buy Rolls-Royce shares on the dips. I think that in the long term, the company can weather the coronavirus storm. It’s worth noting here that the company still expects to turn free cash flow positive at some point in the second half of 2021. It reckons travel will recover and also its cost savings initiatives should start paying off. This has yet to be seen. In fact, the firm expects to announce its interim results on 5 August. So I’ll have a better understanding if the company remains on track. For now, Rolls-Royce has sufficient liquidity and its earnings from its defence sector as well as the money from its disposals to rely on. It also has a strong brand and reputation. Hence I think the stock can recover in 2021. But if things do get worse, it may come to the market and ask for more money. I don’t think this will be viewed positively by investors as it means that times are still tough for the company. This may impact the Rolls-Royce share price. And there’s no guarantee that it will be able to raise the funds. As I said, I feel it has done enough so far and taken the right steps. I think this Covid-19 uncertainty has created a buying opportunity and I’d buy the stock on the dips. I think the stock can recover in 2021. The post Can the Rolls-Royce share price recover in 2021? appeared first on The Motley Fool UK. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Will the Rolls-Royce share price keep falling? How low can the Rolls-Royce share price go? The Rolls-Royce share price falls again! Here’s what I’m doing about it The Rolls-Royce share price is falling in July: here’s why I’d buy Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  42. Where will the Rolls-Royce share price go in June? (31/05/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) has had one of the rockiest rides of the pandemic. Rolls has been up and down so far in 2021, going nowhere really in May. And we’re still looking at a fall of more than 60% over the past two years. Now, I’m going to say right up front, I’ve no idea where the Rolls-Royce share price is going to go in June. But we’re heading for developments that should affect the longer term. And I still can’t work out whether to buy Rolls-Royce shares as a recovery pick. For one, the next step in pandemic opening up is scheduled for 21 June. On that day, the government has pencilled in the removal of the final legal restrictions on social and business movements. Saying that, there’s that Indian variant thing. And the Prime Minister has already said we might have to wait a bit longer to get our full freedoms back. Further delays could see the Rolls-Royce share price weaken in June. Still, the opening up that we’re already enjoying is having its effect. In particular, sun-seekers are heading for the beaches again. And some travel-related shares are recovering. International Consolidated Airlines shares are up 26% so far in 2021, with easyJet not far behind with a 21% gain. TUI hasn’t had such a good year so far though, dropping a few percent. And the Rolls-Royce share price is down 4%. Rolls-Royce share price drivers It’s probably going to be a while before the travel sector recovery feeds through to Rolls-Royce. It’ll take time before engine maintenance requirements start to ramp up again. The other critical thing is that Rolls-Royce suffered big loss in 2020, and needed a major financial rescue package. There’s still cash on the books to keep the aerospace engineer going for a while yet. But will it be enough to last until profits return? The uncertainty behind that question must, surely, weigh heavily on the Rolls-Royce share price for at least a few months yet. At full-year results time, Rolls wasn’t in a position to make much in the way of predictions. That’s not surprising, as the company spoke of the uncertainties of the near- and medium-term outlook for civil aviation. It’s all about cash And we shouldn’t expect the cash situation to reverse in the current year. With those results, Rolls said it expects free cash flow to turn positive in the second half of 2021. But it still expects to suffer a free cash outflow of around £2bn for the full year. The company is hoping for positive free cash flow in 2022 of at least £750m. But that depends critically on the pace of recovery in flying hours, and the success of the firm’s cost-cutting strategy. I’m keenly awaiting first-half results due on 5 August. Any updates on the expected cash flow situation could drive the Rolls-Royce share price in either direction. In the meantime, any positive news from the aviation business in June and beyond would be welcome. I’m not buying yet. I’m going to wait for the clouds of uncertainty to clear a bit. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Where will the Rolls-Royce share price go in June? appeared first on The Motley Fool UK.
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  43. Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? (03/06/2021 - The Motley Fool UK)
    That aviation is going through an awful time right now is an understatement. The upswing has started for most other segments of the economy, but we are still waiting for air travel to restart in earnest.  Not all aviation stocks are made equal There are better days ahead in store though, I feel. And some aviation stocks have already run-up significantly in anticipation of better times.  Low-cost airline Wizz Air, for instance, was recently at all-time-highs. RyanAir, another low-cost carrier, saw its share price rise to three-year highs. easyJet has also seen significant gains over the past year. Yet the speedy share price rise for these stocks combined with the expected slow healing of their financial health makes me doubtful if they can rise more in the near future.  But there are two stocks in aviation I see as having much potential. One is British Airways owner International Consolidated Airlines Group (LSE: IAG) and the other is aircraft engines’ provider Rolls-Royce (LSE: RR). They stand out for how little they have gained since last year’s market crash. IAG’s share price is actually lower than it was at the same time last year and the Rolls-Royce share price is almost at the same level. Rolls-Royce or IAG – which is the better buy? This could be a good opportunity to buy for me. But I do not want to expose myself a whole lot to aviation yet. So, I would like to buy shares of either IAG or Rolls-Royce, not both.  The question now is: which one of them is a better investment for me? Three ways to assess To assess this, I compared them across three parameters. One, their share price trends before the market crash. Two, their financial performances pre-pandemic. And three, their own outlooks for the rest of the year. In understanding their share price performances, I considered the five-year period between early 2015 and early 2020. Turns out that both their share prices have dropped over this time, albeit with much fluctuation during the interim.  In terms of financial performance, IAG is ahead of Rolls-Royce. IAG showed steady growth in revenue and was also profitable in the three years before the pandemic. Rolls-Royce too saw growth in revenue, but it was loss-making for two of the three years. And now it has had another bad year.  The outlook for both companies has improved, with some caution of course. But I think Rolls-Royce may be better placed even if aviation recovery is slow. Besides civil aerospace, power systems and defence systems are important sources of revenue for it. And it is optimistic about their recovery.  If, however, air travel restarts as planned, IAG can start recovering too. It does mention a “high level” of pent-up demand in its latest update.  My takeaway Based on this assessment, I lean towards IAG, largely because of its past performance. However, I will wait for another month to see how air travel picks up. That should indicate better which of the two is better placed. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Cheap UK stocks: should I be buying airline shares ahead of the summer? Where will the Rolls-Royce share price go in June? What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? Should I Invest in IAG shares right now? Manika Premsingh owns shares of easyJet. The Motley Fool UK has recommended Wizz Air Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? appeared first on The Motley Fool UK.
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  44. Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 (17/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) shares have enjoyed a decent start to 2021. The share price is up around 15%, over a period when the FTSE 100 index is only up around 3%. This outperformance has coincided with the release of full-year results, the UK vaccination initiative gaining momentum, and other factors. Over a broader one-year period, the share price is still down over 50%, but I think there are several reasons to be more optimistic for 2021. Full-year results The first reason I’m optimistic for Rolls-Royce shares might sound strange. It’s actually relating to the full-year results that came out last week. The loss before tax was £2.9bn, an exceptionally large figure. Even though this figure was well-reported in the news, Rolls-Royce shares traded sideways on the release date.  Normally I’d expect a share price to plummet on such a bad figure, but it got me thinking. Rolls-Royce shares are already heavily down from 2020. Regular trading updates made investors aware of the bad situation within the company. So really, it was no surprise when the final figure came out. In effect, the share price didn’t fall because it was expected. So if I can discount the loss, what else was there to think about? Well the company cut £1bn in costs during the year. It raised £7.3bn in new capital, and expects to generate £2bn from selling off different assets. From that angle, 2021 looks positive.  A second reason I’d look to buy Rolls-Royce shares is the diversification of the business. For a while, I thought of the business only operating in the civil aviation space. Although this is the largest area, it’s not the only one. The results showed that good profits were made from its power systems and defense arms. In fact, the revenues generated from these two areas combined were larger than from civil aerospace. Going forward into 2021, if these areas can continue to grow, and civil aerospace recovers, Rolls-Royce shares could see a strong move higher. The business would be firing on all fronts, something it hasn’t been able to do in the recent past. Sentiment helping Rolls-Royce shares The final reason I like Rolls-Royce shares is the correlation between positivity and the rising share price. When I mean positivity, I’m talking about the sentiment regarding the pandemic. Here in the UK, the vaccination rollout is marching on. In the US, President Biden has also set out an ambitious timeframe to get people vaccinated. The more this continues, the quicker international travel and flying will start again. On balance, there are still reasons to be cautious with the stock. For example, the impact of the pandemic is likely to linger for some time. It’s not as though anyone can click their fingers and restore the billions lost in 2020 overnight. It’s going to be a slow road to recovery, and one that could weigh on Rolls-Royce shares for a while still to come. As a long-term investor, I can look past this. I would look to buy the stock, even with the knowledge that the recovery won’t be overnight. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’d buy Rolls-Royce shares despite the big 2020 loss Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 appeared first on The Motley Fool UK.
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  45. Rolls-Royce share price: what I’d do given the upcoming full-year result (25/02/2021 - The Motley Fool UK)
    Although shares are still down by around half over the last 12 months, Rolls-Royce (LSE:RR) shares have rallied recently. As of 24 February, the Rolls-Royce share price is up over 9% over the last week and 14% over the last month. Given that the aerospace engine maker reports its 2020 full-year results on 11 March, the Rolls-Royce share price could have further moves ahead of it. If the results and guidance are better than expected, shares could go higher. If they don’t meet expectations, shares could decline. With the upcoming full-year result, here’s what I’d do. The upcoming full-year result In terms of Rolls-Royce’s upcoming full-year result, I’ll look for several things. First, I’d look to see if management updates widebody engine flying hours guidance. Civil aviation is a big part of the company’s business and weakness in the area is one reason why management forecasted a free cash flow outflow of around £2bn in 2021. That amount of expected free cash outflow didn’t meet many analyst estimates. If guidance for wide-body engine flying hours is stronger than expected during the full-year result, however, I reckon the Rolls-Royce share price could rise. Second, I’ll look to see if management updated cash flow guidance. Specifically, I want to see if management is more confident on their free cash flow target for next year. As of late January, management seemed to be hedging somewhat on their target, as they said their goal is “to deliver at least £750 million of free cash flow (excluding disposals) as early as 2022, contingent on the expected recovery in engine flying hours”. If management doesn’t say the contingent part in the full year result report, I’ll be more optimistic on the stock. I’ll also look for any hints of how the ITP Aero sale process is going. If management gets a higher than expected price for ITP Aero, I reckon there is a chance that the market could value Rolls-Royce’s other assets higher too. If that occurs, I think it could help the Rolls-Royce share price. Lastly, I’m been keen to see if management gives any updates on their green strategy. For various reasons whether deserved or not, the market is currently pretty optimistic on many green stocks. If that optimism continues and Rolls-Royce successfully sells itself as more of a green stock itself, I reckon there’s potential for higher stock prices. The Rolls-Royce share price: what I’d do I’d buy and hold shares given the current Rolls-Royce share price. Although it might take longer than expected due to the spread of Covid-19 variants, I nevertheless think a recovery in civil aviation will happen. Companies like GlaxoSmithKline are working on potential vaccine candidates for variants that might be ready as soon as next year and the number of existing new cases is falling in many areas of the world. Longer term, I think Rolls-Royce has potential to add a lot of value by servicing propulsion systems for the electric air taxi market. With this said, Rolls-Royce shares could decline if its full-year results don’t meet expectations. If the time to civil aviation recovery lasts longer than expected or if management makes bad capital allocation decisions, the stock might not do well. The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. 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Rolls-Royce share price: how the company is preparing for the air taxi market Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: what I’d do given the upcoming full-year result appeared first on The Motley Fool UK.
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  46. The Rolls-Royce share price is rising. Should I buy now? (03/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares are popular right now. Last week, Rolls-Royce was the fifth most purchased stock on Hargreaves Lansdown. Meanwhile, on Trading 212, RR is currently the 7th most owned stock overall. This interest in the stock appears to be pushing its share price up. Is this a share I should buy for my own portfolio? Let’s take a look at the investment case. Rolls-Royce shares: the bull case I can see why Rolls-Royce shares are popular at the moment. For starters, the share price has been hit hard due to Covid-19 disruption. Over the last year, RR is down about 50%. As a result, the company has a market cap of just £2.2bn right now. If the prospects for the airline industry improve (which I think they will eventually), Rolls-Royce shares could rise. That’s because the company generates a substantial proportion of its revenues from the manufacturing and servicing of engines for the commercial aviation industry. Secondly, there’s been a lot of talk this year about all-electric planes and ‘air taxis’ and some investors believe that Rolls-Royce could be a big player in these areas. Recently, Rolls-Royce has been developing a high-performance electric aeroplane named Spirit of Innovation. This has completed its first runway taxiing tests, ahead of a first flight, which is expected to take place this spring. “This system and the capabilities being developed will help position Rolls-Royce as a technology leader offering power systems to the urban air mobility market,” said Rob Watson, director of Rolls-Royce Electrical, after the tests. This development certainly looks interesting. Going forward, air mobility could be a genuine source of growth for Rolls-Royce. Is RR a good fit for my portfolio? Having said all that, I’m not convinced that Rolls-Royce shares are a great fit for my portfolio at the moment. I like to invest in companies that are consistently profitable, cash generative, financially sound, and that generate a high return on capital employed. In other words, I like high-quality businesses. Companies like Apple, Microsoft, and dotDigital are some good examples. Companies that have these kinds of attributes tend to be good investments over time. Looking at Roll-Royce’s financial track record, it’s not so impressive. In recent years, the company has posted big losses on a number of occasions (well before Covid-19). And even when it was profitable, return on capital employed was not that high. Meanwhile, Stockopedia gives Rolls-Royce an Altman Z1 score of -0.19 which indicates a “serious risk of financial distress” within the next two years. Overall, Rolls-Royce does not appear to me to be a high-quality business. Better stocks to buy In conclusion, I do think Rolls-Royce shares have the potential to keep rising in the short term. If the airline industry picks up, the company should benefit. However, Rolls-Royce is not the kind of stock I’d buy for my portfolio. I think there are much better stocks I could buy right now that are more suited to my goals (generating strong returns over the long term) and risk tolerance. Like this one…. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Edward Sheldon owns shares in Apple, Microsoft, dotDigital, and Hargreaves Lansdown. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Apple and Microsoft. The Motley Fool UK has recommended dotDigital Group and Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising. Should I buy now? appeared first on The Motley Fool UK.
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  47. Tesla has fallen 35%. How I think it affects the Rolls-Royce share price (09/03/2021 - The Motley Fool UK)
    With it having such a large market cap, Tesla’s fortunes affect many other stocks. Given how influential Tesla is, it’s not out of the question that it indirectly affects Rolls-Royce (LSE:RR) too. With Tesla shares declining from around $880 in late January to $563 on 8 March, here’s how I think it affects the Rolls-Royce share price. Tesla & Rolls-Royce  In the past, I think demand for many electric-related stocks increased due to Tesla’s success. Although many electric stocks don’t really have anything in common with Tesla, some in the market probably thought they did (or anticipated the correlation) and bought shares of the companies. The buying somehow caused more buying and many electric stocks rallied when Tesla rallied. Given that air taxi stocks are electric, I reckon they benefited from Tesla’s success as well. This is despite Tesla not being an air taxi stock itself.  I think Rolls-Royce could benefit if air taxi stocks are in high demand (despite Rolls-Royce also not being an air taxi stock itself — yet). If demand for air taxi stocks is strong, air taxi startups could find it easier to raise money. With more money, they could spend more on R&D and potentially bring a product to the mass market faster. If air taxis become market ready faster, demand for air taxi propulsion systems could increase faster. Assuming Rolls-Royce is the leader in air taxi propulsion systems like it wants to be in the future, RR could stand to benefit with more potential growth too.  By that reasoning, Tesla shares falling could indirectly lower demand for air taxi stocks and indirectly negatively affect Rolls-Royce. Is it the case in practice? While the ‘Tesla affects Rolls-Royce’ fundamental reasoning sounds compelling, the Rolls-Royce share price hasn’t really reflected it. While Tesla shares have surged in 2020, for example, RR actually decreased substantially. As a result, I don’t think Tesla falling 35% from its highs actually affects the Rolls-Royce share price all that much. The market, in my view, seems to be more focused on Rolls-Royce’s civil aerospace business rather than its future potential air taxi propulsion business. Civil aviation gets more media attention, and Rolls-Royce’s near-term fundamentals depend a lot more on civil aviation than air taxi propulsion. The Rolls-Royce share price: what I’d do Rolls-Royce has uncertainty. The Rolls-Royce share price might not do well if air travel doesn’t recover like the market expects. Given that it’s a new market, it’s also not clear if Rolls-Royce will succeed in the air taxi propulsion system market like the company has in the traditional jet engine market. The British company will likely have a lot of competition in that category. Nevertheless, I think the market isn’t really reflecting the potential value in Rolls-Royce’s air taxi propulsion business because it’s still in its very early stages. It also hasn’t gotten much press as management hasn’t really advertised it. As the technology progresses, however, I reckon the market perception of the British company’s air taxi propulsion business could increase. Given the business’ potential and the potential for air travel to eventually recover with the vaccine rollouts, I’d buy and hold shares at the current Rolls-Royce share price. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Tesla has fallen 35%. How I think it affects the Rolls-Royce share price appeared first on The Motley Fool UK.
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  48. The Rolls-Royce share price: 3 things that could give it a boost (29/06/2021 - The Motley Fool UK)
    The one thing that really could give Rolls-Royce (LSE: RR) a boost is an end to travel restrictions. But the reverse is happening right now amid a Covid-19 Delta variant surge. As a result, the Rolls-Royce share price ended Monday down 5.6%, as travel-related stocks declined across the board. Rather than opening up to British travellers, Spain and Portugal have both announced new restrictions. They include the need for vaccination certificates and negative tests, with quarantine as an alternative. Rolls-Royce isn’t the only one suffering, as TUI, International Consolidated Airlines, and the other airlines have all lost ground. We might see some respite should the UK’s restrictions end as hoped on 19 July. But while we still face continually changing pandemic uncertainty, I really can’t see the Rolls-Royce share price getting that one boost that it really needs just yet. Still, pandemic problems will surely only delay the Rolls recovery, won’t they? I mean, that recovery is sure to come, isn’t it? I’m convinced there will be a recovery, but I’m concerned over how long it will take. And the shape of the company that comes out of it could have an impact on Rolls’ long-term valuation. Debt, balance sheet What I’m getting at here is the balance sheet. And progress on that front is the next thing that I think could help the Rolls-Royce share price. Rolls is disposing of its Spanish subsidiary ITP Aero, for around €1.5bn, and that will surely help. The rescue package at Rolls got the company out of its crisis. But it involved taking on £7.3bn in new debt in the 2020 year. I think that’s manageable, providing the company can maintain sufficient liquidity to keep it going until the cash flow taps start opening again. If it can’t, we could see a further round of fundraising. And that would surely hammer the share price again. Right now, we’re looking at a race between Rolls-Royce’s business turnaround and the cash running out. The closer we get to knowing which will win, the greater the effect we should see on the share price. Rolls-Royce share price, medium term These are two nebulous issues, so is there anything more concrete? Well, first-half results are due on 5 August. And I expect the update will be one of the most keenly awaited in the FTSE 100 this year. And everyone will presumably be looking to the state of the firm’s balance sheet. With flying hours hardly changed so far this year, I’ll be looking for anything suggesting that possible further refinancing is on the cards. I’ll be hoping we don’t get it, and looking for upbeat outlook news. If the company makes optimistic noises regarding its balance sheet, and appears confident that it has enough liquidity, I think the shares could get a boost. I do see a strong long-term future for the company. But in the short-to-medium term, I fear events are more likely to have a negative effect than positive. I will not buy for now. The post The Rolls-Royce share price: 3 things that could give it a boost appeared first on The Motley Fool UK. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Should I buy FTSE 100 shares BP or Rolls-Royce for my ISA in July? Top British stocks for July Can the Rolls-Royce share price maintain its momentum? The Rolls-Royce share price is up 170%. Should I buy now? Will the Rolls-Royce share price rise in July? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  49. Does the Rolls-Royce share price make me want to buy in 2021? (21/04/2021 - The Motley Fool UK)
    As stock market crash stories go, the Rolls-Royce Group (LSE: RR) one is not pretty. But is there going to be a happy ending? Disappointingly, the Rolls-Royce share price recovery has gone off the boil a little, and the price is down so far in 2021. Over the past two years, the damage amounts to a painful 68% fall. Rolls-Royce depends on civil aviation for the biggest slice of its income. And while planes were grounded and engines didn’t need maintenance and repair, income for Rolls was hammered. It’s important to remember, though, that that’s not all there is to Rolls-Royce. The firm also has power systems and defence divisions. Still, the grounding of passenger planes was tough. But things are starting to look better now. Or are they? Folks in the UK seem to be super keen to book their holidays in the sun (almost as keen as they are to get back to the pubs, it seems). And the early 2021 recovery in the Rolls-Royce share price was surely based on anticipation of a sun-seeking summer. Some transport firms, including TUI, have made positive sounds about the prospects for international summer holidays this year. It might happen, and the Rolls-Royce share price could head upwards again. New Covid fears But fresh Covid-19 waves have already started around the world. And only this week, the British Prime Minister warned that we’re likely to see a third wave this year. I doubt it will be as devastating as those already past. But I won’t be booking any flights just yet. The prospects for 2021 don’t really matter too much for me anyway. No, I’m thinking of the longer-term future for the Rolls-Royce share price. About what things will be like in, say, five years. And whether the current valuation of the company suggests the shares are a bargain. And that’s where I’m just not sure. Firstly, Rolls-Royce did get itself into a sustainable financial situation. At least, I think it did, for now at least. Unless things get stretched and the company has to go back to the markets for a fresh injection of cash, that is. Is that likely? If the aviation business doesn’t get going again fairly soon and Rolls doesn’t see an improving income stream, I wouldn’t be surprised. Rolls-Royce share price progress? So when will we see the cash flows needed for sustained Rolls-Royce share price progress? Some observers suggest that aviation could get back to 2019 levels by 2024-2025. But those are among the more optimistic guesses. There’s increasing pressure from climate change too, with carbon emissions targets being brought forward. I wouldn’t be at all surprised if 2019 turned out to be a peak year for leisure flights, not to be equalled for a long time. So, on the one hand, I’m seeing a company that looks undervalued on the face of it, and that I’ve liked for years. And I think the Rolls-Royce share price could indeed have a strong future. But there are just too many uncertainties between now and next year for me. So no, I’m not going to buy in 2021. Maybe 2022. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 2 ways the Rolls-Royce share price could benefit from the reopening economy Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? This is what I’d do about the Rolls-Royce share price right now! Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Does the Rolls-Royce share price make me want to buy in 2021? appeared first on The Motley Fool UK.
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